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630 S.E.2d 37 (2006)
FRANCES L. AUSTIN FAMILY LIMITED PARTNERSHIP and Piedmont Land Conservancy, Plaintiffs,
v.
CITY OF HIGH POINT, Defendant.
No. COA05-1514.
Court of Appeals of North Carolina.
June 6, 2006.
Wyatt Early Harris Wheeler LLP, by Scott F. Wyatt, High Point, for plaintiffs-appellants.
Womble Carlyle Sandridge & Rice, PLLC, by Gusti W. Frankel and Alison R. Bost, Winston-Salem, for defendant-appellee.
Andrew L. Romanet, Jr. and John M. Phelps, II, Raleigh, for amicus curiae North Carolina League of Municipalities.
*38 TYSON, Judge.
Frances L. Austin Family Limited Partnership ("AFLP") and Piedmont Land Conservancy (collectively, "plaintiffs") appeal from order entered concluding the presence of the City of High Point's ("defendant") former sewer line on its abandoned and reverted sewer easement does not constitute a further taking of AFLP's property. We affirm.
I. Background
AFLP is the owner of approximately 101 acres located in High Point formerly used as a dairy farm. No sewer lines or pipes were located on the property prior to 1963. In 1963, defendant, in consideration for $988.24, obtained an easement from AFLP's predecessor-in-title for the installation, operation, and maintenance of a sewer line across AFLP's property.
On 17 March 2003, defendant initiated condemnation proceedings for a new sewer pipeline to be placed on AFLP's property as part of defendant's Upper Deep River Outfall Project. This condemnation action was resolved by consent judgement entered 18 March 2005. The consent judgment states that a portion of the existing easement on the property "reverts to the Grantor or its successor in interest upon completion of construction of the new sanitary sewer line."
Pursuant to the 1963 easement, defendant has a twenty-foot wide easement for the placement, operation, and maintenance of its sewer line across AFLP's property. The total area of the 1963 sewer line easement is 67,521.67 square feet. A total area of 55,887.24 square feet of additional permanent sewer line easement was taken in the 2003 Upper Deep River Outfall condemnation proceeding. Portions of the new easement run parallel and overlap with or include portions of the 1963 easement. The Upper Deep River Outfall easement is thirty feet wide. In the consent judgment, defendant also took for temporary construction an additional ten feet on both sides of the thirty foot easement.
Defendant completed the new sewer line on 1 May 2004. Upon completion of the new sewer line, defendant abandoned 26,503.83 square feet of portions of the 1963 sewer easement. Defendant left approximately 1,520 linear feet of sewer pipe buried in the ground within the abandoned easement. The diameter of the abandoned pipe varies between eighteen and twenty-four inches. This pipe was abandoned when the new sewer line *39 was placed into service and is not being used by defendant for a sewer line or any other purpose.
Plaintiffs filed suit in Guilford County Superior Court alleging various claims relating to the underground sewer pipe including taking by inverse condemnation. On 12 August 2005, plaintiffs filed a "Motion for Judicial Determination of Issue Other than Compensation" pursuant to N.C. Gen.Stat. § 40A-47 seeking a ruling from the trial court on whether the continued presence of defendant's sewer pipe on its abandoned sewer easement constitutes a taking of AFLP's property requiring defendant to pay just compensation. The trial court reviewed depositions, pleadings, exhibits, and other materials and concluded "the presence of defendant City of High Point's unused sewer line on its now abandoned sewer easement ... does not constitute a taking of [AFLP's] property under Chapter 40A of the North Carolina General Statutes." Plaintiffs appeal.
II. Issue
Plaintiffs argue the trial court erred by concluding defendant's act of leaving its buried sewer pipe on its abandoned sewer easement did not constitute a taking of AFLP's property for which plaintiffs are entitled to just compensation.
III. Standard of Review
"Conclusions of law drawn by the trial court from its findings of fact are reviewable de novo on appeal." Humphries v. City of Jacksonville, 300 N.C. 186, 187, 265 S.E.2d 189, 190 (1980). Further, "[i]t is well settled that de novo review is ordinarily appropriate in cases where constitutional rights are implicated." Piedmont Triad Reg'l Water Auth. v. Sumner Hills, Inc., 353 N.C. 343, 348, 543 S.E.2d 844, 848 (2001).
IV. Takings and Inverse Condemnation
The Fifth Amendment to the United States Constitution provides in pertinent part, "nor shall private property be taken for public use without just compensation." U.S. Const. amend. V. Article I, Section 19 of the North Carolina Constitution states in part, "No person shall be taken, imprisoned, or disseized of his freehold, liberties, or privileges, or outlawed, or exiled, or in any manner deprived of his life, liberty, or property, but by the law of the land." N.C. Const. art. I, § 19.
While North Carolina does not have an express constitutional provision against the "taking" or "damaging" of private property for public use without payment of just compensation, this Court has allowed recovery for a taking on constitutional as well as common law principles. We recognize the fundamental right to just compensation as so grounded in natural law and justice that it is part of the fundamental law of this State, and imposes upon a governmental agency taking private property for public use a correlative duty to make just compensation to the owner of the property taken. This principle is considered in North Carolina as an integral part of "the law of the land" within the meaning of Article I, Section 19 of our State Constitution. The requirement that just compensation be paid for land taken for a public use is likewise guaranteed by the Fourteenth Amendment to the Federal Constitution.
Long v. Charlotte, 306 N.C. 187, 195-96, 293 S.E.2d 101, 107-08 (1982).
In Charlotte v. Spratt, our Supreme Court discussed the doctrine of inverse condemnation:
Where private property is taken for a public purpose by a municipality or other agency having the power of eminent domain under circumstances such that no procedure provided by statute affords an applicable or adequate remedy, the owner, in the exercise of his constitutional rights, may maintain an action to obtain just compensation therefor.
263 N.C. 656, 663, 140 S.E.2d 341, 346 (1965). An inverse condemnation remedy is provided in this State by statute. N.C. Gen.Stat. 40A-51(a) (2005). Where property has been taken and no complaint containing a declaration of taking has been filed, the owner "may initiate an action to seek compensation for the taking." Id. "In order to recover for inverse condemnation, a plaintiff must show an actual interference with or disturbance of *40 property rights resulting in injuries which are not merely consequential or incidental...." Long, 306 N.C. at 199, 293 S.E.2d at 109.
In Loretto v. Teleprompter Manhattan CATV Corp., the United States Supreme Court dealt with a cable television company's installation of a cable on the plaintiff's apartment building. 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982). New York law required a landlord to permit a cable television company to install its cable facilities on his property to provide cable television service to the tenants. Id. at 421, 102 S.Ct. at 3168, 73 L.Ed.2d at 873. The Supreme Court answered the question of "whether a minor but permanent physical occupation of an owner's property authorized by government constitutes a `taking' of property for which just compensation is due under the Fifth and Fourteenth Amendments of the Constitution." Id.
The Supreme Court recognized the distinction between cases involving a "permanent physical occupation" and cases involving governmental action outside a person's property which results in consequential damages. Id. The Court noted, "A taking has always been found only in the former situation." Id. at 428, 102 S.Ct. at 3172, 73 L.Ed.2d at 877. The Court affirmed "the traditional rule that a permanent physical occupation of property is a taking." Id. at 441, 102 S.Ct. at 3179, 73 L.Ed.2d at 886.
V. Analysis
Plaintiffs argue AFLP is entitled to just compensation because defendant's act in leaving the buried sewer pipe on its abandoned sewer easement across AFLP's property constituted a taking. We disagree.
In 1963, AFLP's predecessor-in-interest granted an express sewer easement across the property to defendant for consideration of $988.24. The language of the express easement states the rights were granted to defendant "forever." However, our Supreme Court has held:
When the purpose, reason, and necessity for an easement cease, within the intent for which it was granted, the easement is extinguished. Hence, if an easement is not granted for all purposes, but for a particular use only, the right continues while the dominant tenement is used for that purpose, and ceases when the specified use ceases.
Atlantic & N.C. R.R. v. Way, 172 N.C. 774, 778, 90 S.E. 937, 939 (1916) (quotation omitted); see also Int. Paper Co. v. Hufham, 81 N.C.App. 606, 609, 345 S.E.2d 231, 234 ("If the deed conveyed only an easement, the estate of the railroad company ceased and terminated when its tracks were removed and the railroad was abandoned[.]"), disc. rev. denied, 318 N.C. 506, 349 S.E.2d 860 (1986).
The 1963 easement was created for an express purpose, being "a sewer line across the property of the parties ... and for the maintenance and upkeep of said sewer line." Under our Supreme Court's precedent, defendant abandoned the easement when it ceased to be used for a sewer line. R.R., 172 N.C. at 778, 90 S.E. at 939. The 18 March 2005 consent order states the abandoned easement "reverts" to AFLP upon the completion of the new sewer line.
Whether or not defendant abandoned portions of the sewer easement is not determinative to the outcome here. Defendant paid AFLP just compensation for the taking. In 1963, defendant paid AFLP's predecessor-in-title for the right to place its sewer line on AFLP's property "forever." AFLP's predecessor-in-title accepted payment of $988.24 as compensation for any lost value to the property as a result of defendant's installation and maintenance of the sewer line within its easement. Defendant has agreed, and the parties stipulate that defendant "shall be responsible for any assessment and/or remediation of contamination emanating from abandoned underground sewer lines on the Property" to the extent required by state or federal statutes or federal, state, or local regulations. Defendant has paid AFLP for the burden to its property of the buried sewer line. Plaintiffs are not entitled to be paid twice for that right.
In Hildebrand v. Telegraph Co., the plaintiff was paid just compensation for a right-of-way taken by the State for highway purposes. The right-of-way was granted for *41 "all purposes for which the State Highway & Public Works Commission is authorized by law to subject said right of way." 221 N.C. 10, 13, 18 S.E.2d 827, 829 (1942). The State granted the defendant the right to place telephone poles on the State's right-of-way. The plaintiff claimed she was entitled to compensation for the additional burden on her land. Id. at 14, 18 S.E.2d at 829-30. Our Supreme Court held, "The plaintiff has been compensated for this additional burden. She may not again recover." Id. Here, the same reasoning applies against AFLP. Plaintiffs were compensated by defendant for the right to place sewer lines within its sewer easement. "Where a landowner has granted a right of way over his land, he must look to his contract for compensation, as it cannot be awarded to him in condemnation proceedings, provided the contract is valid...." Feldman v. Gas Pipe Line Corp., 9 N.C.App. 162, 166, 175 S.E.2d 713, 715 (1970).
Defendant can abandon the easement without further obligation to AFLP to pay compensation or remove the buried pipe. Over eighty-five years ago, our Supreme Court stated, "the owner of the dominant estate is not required to maintain or repair the easement for the benefit of the servient tenement. He may, ordinarily, abandon it altogether, without infraction of any rights of the servient owner." J.D. Craft & Co. v. John L. Roper Lumber Co., 181 N.C. 29, 31, 106 S.E. 138, 139 (1921). Our Supreme Court later reaffirmed this rule and held:
[I]t is well settled at common law that the owner of the dominant estate may abandon an easement if he sees fit without any act of consent or concurrence on the part of the servient tenant. Although, as a matter of fact, the abandonment may injure the land upon or near which the easement was exercised, it could not constitute an actionable injury at common law, and certainly does not amount to a taking within the meaning of the constitution.
Snow v. Highway Commission, 262 N.C. 169, 173, 136 S.E.2d 678, 681-82 (1964). Defendant has fully compensated AFLP for its loss in property value due to placing the sewer pipe on AFLP's property. AFLP is entitled to nothing more than what its predecessors-in-title were paid. AFLP purchased this property with the easement and sewer line in place. The parties reached an agreement on additional damages for the new sewer easement. This assignment of error is overruled.
VI. Conclusion
Defendant fully compensated AFLP's predecessors-in-title for the sewer easement. The trial court did not err by concluding that defendant leaving its buried sewer pipe on its abandoned and reverted sewer easement did not constitute a taking of AFLP's property. The trial court's order is affirmed.
Affirmed.
Judges HUDSON and STEELMAN concur.
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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
STATE OF WASHINGTON,
No. 78057-3-I
Respondent,
DIVISION ONE
V.
JERRY BRAND BOGART, UNPUBLISHED OPINION
Appellant. FILED: September 16, 2019
SMITH, J. — Jerry Bogart challenges the judgment and sentence imposed
pursuant to his jury conviction for first degree assault with a deadly weapon and
unlawful possession of a firearm. He contends that the trial court erred when it
declined to give a cautionary instruction regarding the testimony of a prison
informant. But the trial court’s general instruction on witness credibility instructed
the jury to consider “any personal interest that the witness might have in the
outcome or the issues.” This instruction was sufficient to allow Bogart to argue
that the witness had a motivation to lie. Moreover, we have previously held that
an instruction to view a particular witness’s testimony with caution is improper
because it constitutes an impermissible comment on the evidence.
However, we agree with the parties that the trial court erroneously
imposed a firearm enhancement despite the jury returning a special verdict that
Bogart was armed with a deadly weapon. The criminal filing fee and DNA
No. 78057-3-1/2
(deoxyribonucleic acid) collection fee must also be stricken. We remand for
resentencing consistent with this opinion. In all other respects, we affirm.
FACTS
Kelly LeMoigne and his wife, Vicki Ecklund, were long-time users of
methamphetamine.1 Ecklund had worked off and on as a paid informant for law
enforcement dating back to 1996. At some point in 2015 or 2016, both Ecklund
and LeMoigne provided information to the police about a drug dealer named
James Stevens, resulting in Stevens’ arrest.
In the early morning hours of March 23, 2016, Ecklund contacted Bogart,
from whom she and LeMoigne had bought methamphetamine in the past.
Ecklund told Bogart that LeMoigne would contact him to arrange a time and
meeting place to buy methamphetamine. However, Bogart was friends with
Stevens and “[h]omicidely” angry that Ecklund and LeMoigne “were rats.”
When LeMoigne arrived at the meeting place, Bogart was already there,
standing in front of his car. LeMoigne parked so his car was facing Bogart’s car,
nose to nose. Without getting out of his car, LeMoigne handed Bogart money. In
exchange, LeMoigne received a cigarette pack that he believed contained
methamphetamine. He later discovered it contained only salt.
LeMoigne turned to put the cigarette pack in his center console. When he
turned back around, he “got sucker punched.” Bogart called LeMoigne a “rat” and
said, “This is for James’s niece.” Bogart drew back his hand a second time.
1 At the time of trial, LeMoigne was suffering from advanced esophageal cancer
and testified by way of a perpetuation deposition.
2
No. 78057-3-1/3
Believing Bogart was going to hit him again, LeMoigne sped off, hitting Bogart’s
car. Bogart fired several shots at LeMoigne as he drove off.
While driving back to his house, LeMoigne received a voice mail message
from Bogart. In the message, Bogart asked, in a friendly tone of voice, where
LeMoigne went and stated he was concerned about him. Apparently believing
that he had terminated the call with LeMoigne, Bogart then proceeded to have a
separate conversation with someone on his end of the phone. In a threatening
tone, Bogart stated that LeMoigne and Ecklund were “rats.” He stated that he
had tried to kill LeMoigne and that if he saw him again he was ‘“[gjoing to kill
him.” Bogart’s conversation was recorded on LeMoigne’s voice mail.
The State charged Bogart with first degree assault with a firearm and two
counts of first degree unlawful possession of a firearm. Prior to trial, Bogart
shared a jail cell with Tyler Vorderstrasse for approximately four to six weeks.
Vorderstrasse had known Bogart for several years, and they shared many mutual
friends. Vorderstrasse also knew LeMoigne, Ecklund, and Stevens.
Vorderstrasse testified at trial. He stated that while they were cellmates,
Bogart told him that he punched LeMoigne and called him a “rat” because
LeMoigne and Ecklund had done a “controlled buy” involving Stevens. Bogart
also said he fired shots as LeMoigne drove away, hitting LeMoigne’s car. Bogart
told Vorderstrasse that after he shot at LeMoigne, he took a shower, washed his
clothes to remove any gunshot residue, and cleaned his gun. He also detailed
plans to hide his own car, which had been struck by his bullets.
3
No. 78057-3-1/4
Vorderstrasse testified that he voluntarily provided this information to law
enforcement “with no offer of anything in return.” But Vorderstrasse
acknowledged that the State ultimately agreed to reduce a pending charge
against him in exchange for his testimony against Bogart. And Vorderstrasse
testified that he had previously cooperated with law enforcement in a different
matter and knew that if he “gave information [he] would get a deal.”
Bogart requested that the jury be instructed to consider the testimony of
an informant “with greater caution than that of other witnesses.” Bogart proposed
the following jury instruction, based on a Ninth Circuit model jury instruction:
You have heard testimony from Tyler Vorderstrasse. That
testimony was given in exchange for a promise by the government
that the witness receive beneficial treatment from the government
in connection with this case.
For this reason, in evaluating the testimony of Tyler Vorderstrasse,
you should consider the extent to which or whether his testimony
may have been influenced by this beneficial treatment.
In addition, you should examine the testimony of Tyler
Vorderstrasse with greater caution than that of other witnesses.
The trial court declined to give the instruction.
Bogart testified in his own defense. He admitted that he planned to give
LeMoigne a package containing salt instead of methamphetamine and then to
punch LeMoigne. But he denied that he intended to cause LeMoigne great bodily
harm by shooting at him. Instead, he claimed he did so in self-defense, believing
that LeMoigne was going to hit him with his car.
A jury convicted Bogart as charged. Bogart appeals.
4
No. 78057-3-1/5
DISCUSSION
Bogart contends that the trial court violated his right to present a defense
when it refused to give the instruction regarding Vorderstrasse’s testimony. Citing
federal case law and academic studies, he argues that “the testimony of a prison
informant is inherently untrustworthy” and “is strongly correlated to wrongful
convictions.”
Instructions are adequate if they allow a party to argue its theory of the
case and do not mislead the jury or misstate the law. State v. Barnes, 153 Wn.2d
378, 382, 103 P.3d 1219 (2005). We review a trial court’s decision to give a jury
instruction for abuse of discretion if the decision was based on a determination of
fact. State v. Condon, 182 Wn.2d 307, 315-16, 343 P.3d 357 (2015). If the
decision was based on a legal conclusion, it is reviewed de novo. Condon, 182
Wn.2d at 316.
Here, Bogart’s proposed instruction was not necessary in order for him to
argue that Vorderstrasse’s testimony was inherently untrustworthy. Bogart
extensively cross-examined Vorderstrasse on what benefit he received for his
testimony and at what point he received it. And the jury was already instructed on
how to evaluate the credibility of witnesses. The trial court’s first instruction to the
jury provided as follows:
You are the sole judges of the credibility of each witness.
You are also the sole judges of the value or weight to be given to
the testimony of each witness. In considering a witness’s testimony,
you may consider these things: the opportunity of the witness to
observe or know the things he or she testifies about; the ability of
the witness to observe accurately; the quality of a witness’s
memory while testifying; the manner of the witness while testifying;
5
No. 78057-3-1/6
any personal interest that the witness might have in the outcome or
the issues; any bias or prejudice that the witness may have shown;
the reasonableness of the witness’s statements in the context of all
of the other evidence; and any other factors that affect your
evaluation or belief of a witness or your evaluation of his or her
testimony.
(Emphasis added.) It is not error for a trial court to refuse to give a specific
instruction when a more general instruction adequately explains the law and
allows each party to argue its theory of the case. State v. Hathaway, 161 Wn.
App. 634, 647, 251 P.3d 253 (2011). Because Bogart was able to argue his
theory of the case under the instructions given, the trial court did not abuse its
discretion in declining to give it.
Relying on State v. Carothers, 84 Wn.2d 256, 267-68, 525 P.2d 731
(1974), Bogart contends that the informant instruction is “no different from the
pattern instruction on accomplice testimony in WPIC 6.05, which the Supreme
Court has ruled is not a comment on the evidence.” But in Carothers, the
Washington Supreme Court held that such an instruction is proper only if it
instructs the jury to view any accomplice testimony with caution. It noted that an
instruction to view the testimony of a particular witness with caution would be an
improper comment on the testimony of that witness. Carothers, 84 Wn.2d at 267-
68.
Instead, this court has previously held that a trial court does not abuse its
discretion in declining to give an informant instruction. In State v. Hummel, 165
Wn. App. 749, 266 P.3d 269 (2012), we noted that no Washington case requires
a jury to be instructed as to the potential untrustworthiness of informant
testimony. We also concluded that the informant instruction was more similar to
6
No. 78057-3-1/7
an instruction cautioning the jury about the untrustworthiness of cross-racial
eyewitness testimony—which was held to be a comment on the evidence in
State v. Allen, 161 Wn. App. 727, 255 P.3d 784, affd, 176 Wn.2d 611 294 P.3d
679 (2013)—than it was to the accomplice instruction suggested by Bogart.2
“Any instruction that could lead the jury to infer that the trial court believed or
disbelieved a witness constitutes a judicial comment on the evidence.” Allen, 161
Wn. App. at 742 (citing State v. Faucett, 22 Wn. App. 869, 876, 593 P.2d 559
(1979)). Bogart has not convinced us to depart from our earlier rationale in
Hummel.
Bogart next contends, and the State concedes, that the trial court
erroneously imposed a firearm enhancement when the jury returned a special
verdict finding that Bogart was armed with a deadly weapon. We accept the
State’s concession, vacate the firearm enhancement, and remand for
resentencing consistent with the jury’s special verdict.3
Finally, Bogart challenges the criminal filing fee and DNA collection fee
imposed as part of his sentence. Bogart contends, and the State concedes, that
both fees must be stricken because he is indigent and because his DNA was
2 We note, as we did in Allen, that such an instruction might be appropriate in a
federal case, “where there is no constitutional prohibition from the judge commenting on
matters of fact,” but not in Washington, where our constitution contains such a prohibition.
Allen, 161 Wn. App. at 740.
~ Bogart also contends that because the jury did not find he was armed with a
firearm, the trial court must vacate the order to register as a felony firearm offender. But
ROW 9.41.330 provides: “[Wjhenever a defendant in this state is convicted of a felony
firearm offense . . the court must consider whether to impose a requirement that the
.
person comply with the registration requirements of ROW 9.41.333 and may, in its
discretion, impose such a requirement.” Bogart was convicted of unlawful possession of
a firearm, which is a “felony firearm offense.” RCW 9.41 .010(1 0)(a). Thus, the trial court
had the authority to impose the registration requirement.
7
No. 78057-3-1/8
collected following a prior felony conviction. Although these fees were mandatory
when imposed, the Washington Supreme Court has since held in State v.
Ramirez, 191 Wn.2d 732, 746-50, 426 P.3d 714 (2018), that courts may not
impose discretionary legal financial obligations on an indigent criminal defendant.
We accept the State’s concession and remand for the trial court to strike these
fees from the judgment and sentence.
We affirm Bogart’s convictions. We remand to the trial court to vacate the
firearm enhancement, resentence Bogart based on the deadly weapon
enhancement, and strike the criminal filing fee and DNA collection fee from the
judgment and sentence.
/
WE CONCUR:
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602 So.2d 330 (1992)
Judith Anne Koby MILLER
v.
Kenneth Victor MILLER.
Kenneth Victor MILLER
v.
Judith Anne KOBY, wife of Kenneth Victor Miller.
Nos. 91-CA-2209, 91-CA-2210.
Court of Appeal of Louisiana, Fourth Circuit.
June 30, 1992.
*331 Richard L. Ducote, Fine & Associates, New Orleans, for appellant.
Steven R. Scheckman, New Orleans, for appellee.
Before LOBRANO, PLOTKIN and LANDRIEU, JJ.
PLOTKIN, Judge.
Appellant Judith Miller seeks review of three aspects of a trial court judgment in this domestic dispute. First, she challenges the ruling which granted her ex-husband, appellee Kenneth Miller, visitation with the children of the marriage Jordan, now 9, and Hannah, now 5. Second, she appeals the trial court's finding that the two parties were mutually at fault in causing the break-up of the marriage. Third, she contests the trial court's decision to maintain jurisdiction over the case in Louisiana under the Uniform Child Custody Jurisdiction Act (UCCJA). We affirm the trial court judgment in all respects.
FACTS:
On October 20, 1987, Ms. Miller filed a petition for separation, alleging physical abuse by Mr. Miller. The trial court initially entered a consent judgment on April 15, 1988 granting the parties joint custody of the two minor children. The consent judgment named Ms. Miller domiciliary parent and included a child support award.
On May 11, 1988, Mr. Miller filed a Petition for Divorce, citing separation without reconciliation for more than a year. In answering the petition, Ms. Miller alleged that Mr. Miller had sexually abused Hannah; Ms. Miller also sought permanent alimony. At the same time, she filed a Petition for Domestic Abuse Assistance, accusing Mr. Miller of sexually abusing Hannah and of physically abusing her. That petition resulted in a restraining order preventing Mr. Miller from visiting with his children and an order awarding Ms. Miller "temporary sole custody" of the children. The two cases were consolidated on June 12, 1989.
On July 13, 1989, Mr. Miller filed an answer and reconventional demand to the Petition for Domestic Abuse Assistance, denying Ms. Miller's accusation concerning his alleged sexual abuse of Hannah and requesting that his custody and visitation rights be reinstated. Mr. Miller also requested a court-ordered examination of all parties. A judgment of divorce was granted to Mr. Miller on December 5, 1989.
On December 12, 1989, the court reinstated limited supervised visitation rights to Mr. Miller, conditioned on his agreement to submit to therapy. Then, on December 23, 1989, Mr. Miller was awarded certain supervised visitation over the Christmas holidays.
On February 16, 1990, Ms. Miller filed a "Petition for Sole Custody and Termination of Visitation Custody" in Indiana, where she had moved without court permission after receiving the temporary sole custody order. In her petition filed in the Indiana court, Ms. Miller again alleged that Mr. Miller had sexually abused his daughter. The Indiana court declined jurisdiction and dismissed Ms. Miller's action on May 14, 1990, stating that it was "most inadequately informed" about the cause of action pending before Civil District Court here in Louisiana and noting that the same matters were at issue in both cases.
On April 27, 1990, Ms. Miller filed a motion to terminate Mr. Miller's visitation *332 rights in the Louisiana court, requesting findings of fact. On June 1, 1990, the trial court appointed Valerie Wolf, B.C.S.W., as Mr. Miller's therapist, and issued an order holding Ms. Miller's attorney, Richard Ducote, in contempt of court for interfering with the court's prior visitation order. On June 1, 1990, the court appointed Alan Klein, Ph.D. to evaluate all parties pursuant to the motion filed by Mr. Miller. On October 1, 1990, Ms. Miller filed a rule for alimony and modification of child support.
Trial of the matter was held on December 17 and 18, 1990. On December 28, 1990, the trial court issued a judgment granting Ms. Miller sole custody of the minor children and denying her request for an increase in child support and for permanent alimony. Finally, on February 14, 1991, the trial court entered a judgment granting Mr. Miller six months of supervised visitation, followed by unsupervised, then unsupervised overnight visitation. The trial judge also ordered all parties to seek psychotherapy and found both Mr. and Ms. Miller at fault in the breakup of the marriage. Furthermore, the trial court maintained jurisdiction over the case in Louisiana under the UCCJA. In her brief reasons for judgment, the trial judge stated that she "does not believe that Hannah Miller was molested by her father."
MOLESTATION ALLEGATIONS:
Ms. Miller seeks reversal of the judgment which reinstated Mr. Miller's visitation rights, claiming that the trial judge was manifestly erroneous in concluding that Hannah had not been molested by her father.
At trial, the judge heard the testimony of both Mr. and Ms. Miller, as well as expert testimony from the court-appointed psychologist, Dr. Klein, and from Mr. Miller's court-appointed therapist, Ms. Wolf. Deposition testimony from two of Hannah's therapists, Linda Connor and Dr. Dan Linkenhoker, was also presented. Both Dr. Klein and Ms. Wolf testified that they did not believe that Mr. Miller had sexually abused Hannah, while both Ms. Connor and Dr. Linkenhoker stated by deposition that they believed that Hannah had in fact been molested by her father.
In Louisiana, a trial court's findings of fact based on decisions to credit the testimony of one witness or of one set of witnesses over the testimony of another are entitled to "great deference" since "only the factfinder can be aware of the variations in demeanor and tone of voice that bear so heavily on the listener's understanding and belief in what is said." Rosell v. ESCO, 549 So.2d 840, 844 (La.1989). In fact, a factfinder's decision on credibility issues "can virtually never be manifestly erroneous or clearly wrong." Id. at 845. The same rule applies in cases involving "two permissible views of the evidence." Id. at 844. When the record reveals conflicts in testimony, but also "furnishes a reasonable factual basis for the trier of fact's finding," a trial court judgment may not be reversed "even though the appellate court may feel its own evaluations and inferences are as reasonable." Canter v. Koehring Co., 283 So.2d 716, 724 (La. 1973). In the absence of a finding of manifest error, appellate courts are bound to affirm the decision of the factfinder. Rosell, 549 So.2d at 844.
In reviewing contrasting expert testimony, the trier of fact has the responsibility "to determine which evidence is the most credible." Sistler v. Liberty Mutual Ins. Co., 558 So.2d 1106, 1111 (La.1990). In the instant case, the trial judge concluded that the opinions of the court-appointed expert witnesses were more credible than the opinions of Ms. Miller's expert witnesses. After reviewing the entire record, we find no manifest error in that decision.
Ms. Miller argues in brief that the above rules giving deference to the trial court's decision on this issue should not apply in this case. In support of this position, she cites Schwartz v. Bourgeois, 422 So.2d 1176 (La.App. 4th Cir.1982), writ denied 429 So.2d 153 (La.1983), in which this court refused to apply the manifest error rule to a trial court decision based solely on pleadings and depositions. However, the trial court's decision in the instant case is based on a combination of live witnesses *333 and deposition testimony. In fact, the testimony which the trial court chose to believe was all live testimony. Additionally, the Louisiana Supreme Court specifically referred to expert deposition testimony in Sistler, saying that the rule that great deference is to be accorded to the trial court's factual findings is based on both the allocation of functions between the three tiers of this state's court system and "the trial court's opportunity to evaluate live witnesses or to evaluate a mixture of deposition and live testimony." Thus, the exception to the manifest error rule established in Schwartz does not apply.
Ms. Miller also contests the trial court's decision to credit the testimony of Mr. Miller's therapist and the court-ordered psychologist over the testimony of Hannah's therapist, arguing that the testimony of a treating therapist is entitled to greater weight than that of a psychologist who examined Hannah only for purposes of litigation. Celestine v. U.S. Fidelity & Guaranty Co., 561 So.2d 986, 990 (La.App. 4th Cir.1990). However, Ms. Miller's argument ignores the fact that Ms. Wolf is Mr. Miller's therapist and thus is entitled to greater weight than her witnesses under the exact same rule she cites to give her own witnesses more credibility. In fact, the record reveals unequivocally that neither Dr. Linkenhoker nor Ms. Conner examined Mr. Miller at any length. Dr. Linkenhoker admitted in his deposition that further information about Mr. Miller would have been helpful to him. Additionally, both of Ms. Miller's witnesses admitted that their evaluation of Hannah were performed a considerable period of time after the alleged incident, and indicated that they would have been more reliable had they been done sooner.
In the face of such conflicting interests, this court is bound by the trial court's determination on this issue. Accordingly, the judgment granting Mr. Miller visitation with his children is affirmed.
MUTUAL FAULT:
Ms. Miller contests the trial court's decision finding both parties at fault in the break up of the marriage and denying Ms. Miller permanent alimony. She claims that Mr. Miller failed to prove that she was guilty of any of the grounds for separation listed in former La.C.C. art. 138adultery, habitual intemperance, excesses, cruel treatment, outrages which make living together insupportable, or abandonment. See Brewer v. Brewer, 573 So.2d 467, 467 (La.1991).
In the instant case, Mr. Miller admits that he was physically abusive on occasion. Thus, there is no question about his fault in the termination of the marriage. However, the record also reveals that Ms. Miller was not without fault in causing the marital problems. Mr. Miller testified that he and his wife occasionally engaged in "pushing and shoving" contests, and that he felt that Ms. Miller sometimes "provoked" his violence, although he never thought that his violence was justified. He stated that his wife's "method of arguing was to come right at you and stay right on top of you," which sometimes caused him to push her away. Trial transcript, Vol. I, page 24. Mr. Miller also stated that his wife had hit him in the back of the head while he was cleaning out a closet and that she had thrown a vase at him and had thrown hot coffee on him. Mr. Miller claims that Ms. Miller used a lot of obscene language against him, and that she would "foam at the mouth sort of like she had no control of her saliva, scream at me, lose control." Id. at page 280.
Ms. Miller denied that she had ever been abusive to Mr. Miller, but admitted on questions from Mr. Miller's attorney that she had told her husband she was dissatisfied with their marriage. She also admitted telling a therapist in Mr. Miller's presence that she was concerned that Mr. Miller might have homosexual tendencies. She later admitted that that action could have a "devastating effect" on her marriage.
Mr. Miller's therapist, Ms. Wolf, testified that Mr. Miller believed that he had been victimized by his wife, "largely emotionally," in the following ways: "not agreeing with him on things, demeaning him, putting him down, isolating the children away from him, those kinds of things." Id. at page *334 258. Also in "[c]onstant arguing, not accepting his point of view, not going along with things he wanted to do." Id. Other types of "victimization" related to Ms. Wolf by Mr. Miller included throwing things at him, calling him names, and engaging in "screaming fights." Id.
Dr. Klein, the court-appointed psychologist, testified that Mr. Miller's aggressiveness toward his wife was "a very direct response to Mrs. Miller's provocativeness." Id., Vol. II, page 35. He stated that Mr. Miller has good control of his impulses and is unlikely to strike out at someone unless he is provoked.
Although a finding that a spouse was at fault in causing the termination of a marriage must be based on something more than "fault in a generic sense, i.e., imperfection," we believe that the trial court judgment finding the parties in this case mutually at fault in causing the break up of the marriage is supported by the record. The trial judge failed to state the exact grounds for finding Ms. Miller at fault; however, the record reveals that the trial judge could reasonably have concluded that Ms. Miller was guilty of cruel treatment of her husband. Thus, the trial court judgment denying Ms. Miller permanent alimony is affirmed.
UCCJA:
LSA-R.S. 13:1702 provides, in pertinent part, as follows:
A. A court of this state which is competent to decide child custody matters has jurisdiction to make a child custody determination by initial or modification decree if:
(1) This state (i) is the home state of the child at the time of commencement of the proceeding, or (ii) had been the child's home state within six months before commencement of the proceeding and the child is absent from this state because of this removal or retention by a person claiming his custody or for other reasons, and a parent or person acting as parent continues to live in this state; or
(2) It is in the best interest of the child that a court of this state assume jurisdiction because (i) the child and his parents, or the child and at least one contestant, have a significant connection with this state, and (ii) there is available in this state substantial evidence concerning the child's present or future care, protection, training, and personal relationships, or
. . . . .
(4)(i) It appears that no other state would have jurisdiction under prerequisites substantially in accordance with Paragraphs (1), (2), or (3), or another state has declined to exercise jurisdiction on the ground that this state is the more appropriate forum to determine the custody of the child, and (ii) it is in the best interest of the child that this court assume jurisdiction.
In maintaining jurisdiction in the Louisiana court under the above provisions, the trial judge stated as follows:
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that this Court shall maintain continuing jurisdiction over this matter pursuant to the Uniform Child Custody Jurisdiction Law (UCCJL), R.S. 13:1700 et seq. because it is in the best interest of the minor children that this Court maintain continuing jurisdiction due to the significant connection between the children and parents with this state and before this court (R.S. 13:1702A(2)). The Court further finds that Judith Anne Koby Miller unilaterally removed the children to the State of Indiana without Court approval during the pendency of this matter and subsequently attempted to litigate the issue of custody before the courts of Indiana, and without notifying the Indiana Court of the pendency of these proceedings before the Civil District Court for the Parish of Orleans (R.S. 13:1700A(1) and (5)). The Court further finds that it is necessary to maintain continuing jurisdiction over this matter to discourage continuing controversies over the children's custody and visitation rights in the interest of greater stability of the home environment and of secure family relationships for the children. (R.S. 13:1700A(4)); and, because this Court can best decide any future disputes in this case in the interest of the children given the significant evidence that has been adduced before this Court. (R.S. 13:1700A(2) and (3)).
*335 Ms. Miller claims that the trial court judgment cited above is clearly erroneous because Indiana is now the "home state" of the children. She also contests the trial judge's statement that the children have "significant connections" with the state, citing the fact that the children have both paternal and maternal relations in Indiana and that their teachers and therapists are in Indiana.
However, Ms. Miller's arguments are misplaced; the fact that the children also have "significant connections" with another state does not mean that they do not have "significant connections" with Louisiana. In fact, the record shows that the children do have significant connections in Louisiana since their father resides here and Louisiana was the "home state" of the children at the time these proceedings were commenced. Additionally, as the trial judge notes, Civil District Court in Orleans Parish has adduced significant evidence in this case, all of which continues to bear on the custody issues. Finally, Ms. Miller's protestations to the contrary notwithstanding, the record indicates that she did in fact act in bad faith in removing her children to another state without court permission during the pendency of this action and in seeking to litigate the exact issues being considered by this court in the Indiana court without informing that court of the pendency of the action here. Furthermore, the Indiana court has previously declined to exercise jurisdiction in this matter.
Thus, the trial court judgment finding that the Louisiana court should retain continuing jurisdiction on the custody matters because it is in the best interest of the children and because the children have "significant connections" with the state is not manifestly erroneous. Accordingly, it is affirmed.
CONCLUSION
For the above and foregoing reasons, the trial court judgment is affirmed in all respects.
AFFIRMED.
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276 F.2d 77
In the Matter of UNITED SHOE MACHINERY CORPORATION, Movant.
No. 5638 (Original).
United States Court of Appeals First Circuit.
March 18, 1960.
Robert Proctor and Choate, Hall & Stewart, Boston, Mass. and Ralph M. Carson and Davis Polk Wardwell Sunderland & Kiendl, New York City, for movant.
Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.
ALDRICH, Circuit Judge.
1
We have before us a motion for leave to file a petition for a writ of mandamus under the all-writs statute, 28 U.S.C. § 1651, to compel a district judge to recognize an affidavit of prejudice and disqualify himself prior to trial. We have always construed this statute guardedly. In re Chappell & Co., 1 Cir., 1953, 201 F.2d 343; In re Sylvania Electric Products, Inc., 1 Cir., 1955, 220 F.2d 423. In other circuits it has been held inapplicable to just such a situation as this, Korer v. Hoffman, 7 Cir., 1954, 212 F.2d 211, 45 A.L.R.2d 930; Green v. Murphy, 3 Cir., 1958, 259 F.2d 591, although it is not clear whether the majority of the court in the second case based its decision on lack of jurisdiction, or on the exercise of discretion in the particular case. This latter rather clearly appears to be the view of the courts in Minnesota & Ontario Paper Co. v. Molyneaux, 8 Cir., 1934, 70 F.2d 545, and In re Lisman, 2 Cir., 1937, 89 F.2d 898. The contrary case of Gladstein v. McLaughlin, 9 Cir., 1955, 230 F.2d 762, is perhaps a special case. In any event, since this would ultimately be a discretionary matter, we make a preliminary examination of the affidavit before reaching the question of power. See Williams v. Kent, 6 Cir., 1954, 216 F.2d 342; Dilling v. United States, 1944, 79 U.S.App. D.C. 47, 142 F.2d 473.
2
In 1947 a civil antitrust action was instituted by the government against petitioner in the District of Massachusetts. At this time the judge before whom the present action is pending was the United States Attorney for the district. His name, along with a number of others, appeared at the end of the complaint as of counsel for the government. Thereafter, long before trial, he was elevated to the bench. The case was tried before another judge, and decided in favor of the government. United States v. United Shoe Machinery Corp., D.C.D.Mass.1953, 110 F.Supp. 295, affirmed, 1954, 347 U.S. 521, 74 S.Ct. 699, 98 L.Ed. 910. The present suit, a private treble-damage action, was commenced in December 1956, and was then permanently assigned (by lot), in accordance with local practice, to the present judge. Plaintiff alleged in the complaint that it was relying upon the government decree. It sought damages going back beyond 1946. Petitioner moved to strike all claims prior to December 1952 on the ground that the statute of limitations had run. The court denied this motion, and petitioner sought to persuade the court to certify this question as meriting an immediate appeal under 28 U.S.C. § 1292(b). The plaintiff opposed, and a hearing was held on June 30, 1959. At this hearing matters occurred which form part of the affidavit of prejudice. Thereafter the court issued the certificate, we accepted the appeal, and reversed. United Shoe Machinery Corp. v. International Shoe Machine Corp., 1 Cir., 1960, 275 F.2d 459.
3
Returning to the hearing of June 30, 1959, it appears from the brief portions of the transcript thereof annexed to the affidavit that the court made certain remarks indicating a highly unfavorable opinion of the conduct of general counsel of petitioner's patent division in some former matter, apparently unconnected with this case. It is alleged that this counsel is an important prospective witness. Also at this hearing the court construed a statement of petitioner's trial counsel as reflecting upon his personal integrity, and made an indignant reply. It appears that counsel disclaimed any such intention, but counsel's original statement is not set forth, and we note that we cannot tell whether the court's interpretation was a misconstruction or not. The affidavit was filed on July 27, 1959. The court dismissed it on September 3d, as neither "sufficient or timely." This motion was filed March 4, 1960.
4
The affidavit alleges bias and prejudice based on the court's 1947 connection with the government case; the court's characterization on June 30, 1959, of general counsel's former conduct; and the court's assertion that trial counsel had impugned his integrity. The affidavit was filed pursuant to 28 U.S.C. § 144, the material portion of which reads as follows:
5
"Bias or prejudice of judge. Whenever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party, such judge shall proceed no further therein, but another judge shall be assigned to hear such proceeding."
6
The requirement of timeliness is of fundamental importance. The first ground of the affidavit is untimely as matter of law. We do not see how anyone could read the statute and think otherwise. Petitioner knew of this circumstance for two and a half years and said nothing. On the bare record before us, we cannot tell whether the remaining grounds were timely asserted or not. Petitioner waited 27 days, only 15 of which were consumed, according to the affidavit, in obtaining a transcript of the hearing. We do not know what proceedings took place during this interval. One of the reasons for requiring promptness in filing is that a party, knowing of a ground for requesting disqualification, can not be permitted to wait and decide whether he likes subsequent treatment that he receives. As was said in State ex rel. Shufeldt v. Armijo, 1935, 39 N.M. 502, at page 506, 50 P.2d 852, at page 855,
7
"A litigant cannot experiment with the judge presiding over the case * * *.
8
"* * * We cannot permit a litigant to test the mind of the trial judge like a boy testing the temperature of the water in the pool with his toe, and if found to his liking, decides to take a plunge."
9
But regardless of whether the affidavit was timely in any respect, this petition is not. It proposes delay and interruption in the orderly procedure of the case. Many of the reasons for requiring diligence with respect to the affidavit hold equally here. General policy with respect to interlocutory relief is illustrated by 28 U.S.C. § 1292(b) requiring that application for hearing such matters not appealable as of right be made within ten days. Even interlocutory appeals that can be taken as of right must be taken in the usual thirty days. No cause is shown for the extraordinary delay here of six months following the court's order dismissing the affidavit.
10
Plaintiff has no standing to oppose the present petition, and if its motion for leave to file a brief is construed as a motion to intervene, it is denied for the reason that it contains uncalled for ad hominem argument.
11
The motion for leave to file is denied.
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156 B.R. 303 (1990)
In re GRANADA, INC., Debtor.
Peter W. BILLINGS, trustee for Granada, Inc., Plaintiff/Appellee,
v.
KEY BANK OF UTAH, Commercial Security Bank and Commercial Security Key Bank, Defendants/Appellants.
Civ. No. C-90-667W, Bankruptcy No. 87C-00693.
United States District Court, D. Utah, Central Division.
November 20, 1990.
*304 Peter W. Billings, Jr., Robert P. Rees, Salt Lake City, UT, for plaintiff, trustee.
Robert D. Merrill, Carolyn Montgomery, William R. Richards, Salt Lake City, UT, for defendants.
Robert A. Goodman, Virginia S. Smith, Salt Lake City, UT, for First Interstate Bank.
Jeffrey W. Shields, Salt Lake City, UT, for West One Bank.
Memorandum Decision and Order
WINDER, Chief Judge.
This matter is before the court on appeal from a bankruptcy court Memorandum Opinion and Order dated May 25, 1990. 115 B.R. 702. A hearing was held on October 10, 1990, at which the trustee, Peter W. Billings, Jr., represented himself. He was assisted by Robert P. Rees. The defendants were represented by William R. Richards. The court allowed First Interstate Bank of Utah and West One Bank, Utah to submit memoranda and appear as amicus curiae. First Interstate was represented at the hearing by Robert A. Goodman and West One was represented by Jeffrey W. Shields. The court had carefully read the relevant documents submitted by the parties before the hearing, and at the conclusion of the hearing, the court took the matter under advisement. Having considered the matter further, the court now renders the following memorandum decision and order.
This court must accept the bankruptcy court's findings of fact unless the findings are clearly erroneous. Bankr.Rule 8013; Rowe Int'l v. Herd, 840 F.2d 757, 759 (10th Cir.1988). In addition, this court must make a de novo review of the bankruptcy court's legal conclusions. Id. The defendants do not contend on appeal that the bankruptcy court's factual findings are clearly erroneous. Consequently, this court will accept and briefly set out the facts as found by the bankruptcy court.
During all times relevant to this motion, Granada was a general partner in two Utah limited partnerships, Ashley Creek, Ltd. and Suntrail Enterprises. Granada was *305 also a partner in one Utah general partnership, Westwood Partners. These three partnerships will be referred to collectively as "the partnerships." Between 1982 and 1984 Commercial Security Bank made a loan to each of the partnerships. The loans were secured by partnership property and guaranteed by C. Dean Larsen, the president of Granada. Key Bank is the successor-in-interest to Commercial Security Bank. The three defendants will be referred to collectively as "the defendant" or "Key Bank."
The dispute in this case grows out of a particular management practice carried on by Granada. As the partnerships' general partner, Granada did not allow funds to accumulate in the individual partnerships. As revenues were received by the partnerships, Granada would "upstream" the excess funds to an account in Granada. Such transactions were recorded on Granada's and the partnerships' books as either increases in Granada's debt to the partnerships or reductions in the partnerships' debt to Granada. When the partnerships needed funds to meet expenses, Granada would "downstream" funds back to the partnerships. These transactions were recorded on Granada's and the partnerships' books as either reductions in Granada's debt to the partnerships or increases in the partnerships' debt to Granada. Checks were then drawn on the partnerships' accounts to cover the partnerships' immediate obligations. Funds were transferred to the partnerships only when necessary to meet expenses. Otherwise, the funds upstreamed from the partnerships were used to meet Granada's expenses or transferred to other partnerships. Pursuant to this practice, the defendant received checks drawn on the partnerships' accounts as payments on the loans the bank had made to the partnerships.
The bankruptcy court found that the debts created by the upstreaming and downstreaming of funds between Granada and the partnerships were never reduced to "notes and repayment schedules were never generated." Billings v. Key Bank, 115 B.R. 702, 705 (Bankr.D.Utah 1990). The entities relied entirely on bookkeeping entries to keep track of the transfers. The bankruptcy court also found that "Granada controlled the bank accounts of the partnerships. . . ." Id. at 706.[1] For purposes of cash management, Granada and the partnerships operated as one entity.
On February 13, 1987, Granada filed a Chapter 11 bankruptcy petition, and in June 1987 the trustee was appointed. The trustee brought this action against Key Bank seeking to recover preference payments made by Granada. The trustee argued that Granada preferred Key Bank by transferring funds to the partnerships which transferred the funds to the bank and that he should be permitted to recover directly from Key Bank as the initial transferee under 11 U.S.C.A. § 550(a) (West 1979 & Supp.1990).[2] The trustee took the position that the partnerships were not transferees under § 550. The trustee maintained that the partnerships were mere conduits between Granada and the bank. In response, Key Bank denied that the partnerships were conduits. The bank insisted that the partnerships were initial transferees and the bank was a subsequent *306 transferee. The bankruptcy court agreed with the trustee.
The bankruptcy court divided its analysis into two parts. The court first found that the transfers from Granada were preference payments under 11 U.S.C.A. § 547(b) (West 1979 & Supp.1990). The court found that all the elements of § 547(b) were met including the requirement that the transfers were made "to or for the benefit of a creditor." Id. The court determined that the transfers from Granada benefitted Granada's president, C. Dean Larsen, since he personally guaranteed the loans from Key Bank to the partnerships.
On appeal the defendant takes issue with this part of the bankruptcy court's analysis. The defendant argues that the bankruptcy court's reasoning ignores the fact that the funds were initially transferred from the debtor to the partnerships. Since Larsen had no contingent liability on the debt between Granada and the partnerships, the defendant argues that Larsen could not be a creditor who benefitted from the initial transfer.
This court will not reexamine the bankruptcy court's conclusion that the transfers were preference payments under § 547. Even if the transfers were not preferential as to Larsen, they were clearly preferential as to the partnerships. Consequently, further analysis under § 547 is not helpful to the ultimate resolution of this dispute.
The second part of the bankruptcy court's analysis addressed the issue of liability under § 550. That court determined that the defendant was an initial rather than a subsequent transferee under § 550(a). The court reasoned that since the partnerships had no practical dominion or control over the transferred funds, they should be considered nothing more than mere conduits through which the payments passed. Accordingly, the bankruptcy court found that the trustee may recover the funds from the defendant as the initial transferee. This court believes that the bankruptcy court's analysis under § 550 must be reversed for the reasons stated below.
The conduit theory has been developed by the courts in an effort to avoid unfairness that might result from the literal application of 550(a). Gropper v. Unitrac, S.A. (In re Fabric Buys of Jericho, Inc.), 33 B.R. 334 (Bankr.S.D.N.Y.1983), citing, 4 Collier on Bankruptcy § 550.02, at 550-8 (15th ed. 1985). The concerns underlying development of the conduit theory are reflected in Chief Justice Cardozo's commonly cited language in Carson v. Federal Reserve Bank:
The person to be charged with liability, if he has parted before the bankruptcy with title and possession, must have been more than a mere custodian, an intermediary or conduit between the bankrupt and the creditor. Directly or indirectly he must have had a beneficial interest in the preference to be avoided, the thing to be reclaimed.
254 N.Y. 218, 172 N.E. 475, 482 (1930). In Carson the court held that a federal reserve bank that acted as an agent for its member banks in collecting funds from an insolvent bank was not liable for the funds collected and credited to its members' accounts. Following the rationale in Carson, courts have recently held that preference payments cannot be recovered from entities that act as nothing more than conduits between debtors and their preferred creditors. See e.g. Kaiser Steel Resources, Inc. v. Jacobs (In re Kaiser Steel Corp.), 110 B.R. 514 (D.Colo.1990), aff'd on other grounds, Kaiser Steel Corp. v. Charles Schwab & Co., Inc., 913 F.2d 846 (10th Cir.1990); In re Fabric Buys of Jericho, Inc., 33 B.R. 334. These courts have concluded that a conduit does not constitute an initial transferee under § 550(a). Instead, a creditor who received a preference payment from a conduit is liable as an initial transferee. This prevents the creditor from raising the defense provided in § 550(b) for subsequent transferees.[3]
*307 The conduit theory may be used either offensively or defensively. An intermediary may defend against an action to recover a preference by demonstrating that it was a mere conduit between a debtor and its creditor. In re Kaiser Steel Corp., 110 B.R. 514; In re Fabric Buys of Jericho, Inc., 33 B.R. 334. Alternatively, in an effort to bypass an intermediary, a trustee may argue that the intermediary served as nothing more than a conduit of funds. Lowry v. Security Pacific Business Credit, Inc. (In re Columbia Data Prod. Inc.), 892 F.2d 26 (4th Cir.1989); Ross v. John Mitchell, Inc. (In re Dietz), 94 B.R. 637 (Bankr. 9th Cir.1988), aff'd, 914 F.2d 161 (9th Cir.1990). In the present case the trustee asserts the conduit theory offensively in order to prevent Key Bank from defending under § 550(b). The critical question is whether the partnerships acted as conduits such that Key Bank should be treated as the initial transferee under § 550(a).
Courts have used several different tests in their effort to determine the circumstances under which an entity should be considered a conduit. Billings v. Key Bank, 115 B.R. at 709 n. 12.[4] The bankruptcy court did not apply all of these tests. The bankruptcy court believed that since the partnerships qualified as conduits under the "dominion and control" test, the application of any other test was unnecessary. This court believes that the bankruptcy court's approach is unnecessarily restrictive. However, the court believes that the partnerships in this case do not qualify as conduits even if our analysis is limited to the dominion and control test.
The dominion and control test was introduced by the Seventh Circuit in Bonded Fin. Serv. v. European Am. Bank, 838 F.2d 890. In re Kaiser Steel Corp., 105 B.R. 639, 646 (Bankr.D.Colo.1989), rev'd, 110 B.R. 514 (D.Colo.1989). The Seventh Circuit determined that the "minimum requirement of status as a `transferee' is dominion over the money or other asset, the right to put the money to one's own purposes." Id. at 893. Conversely, an entity through which a preference payment is transferred that has no dominion over the payment is a mere conduit that cannot be required to account for the payment.
In Bonded the debtor, Bonded Financial Services, sent a check to European American Bank to be deposited in a creditor's general account. The check was made payable to the bank. Ten days later the creditor instructed the bank to remove the funds from the creditor's general account and apply them to a loan account at the same bank. Soon thereafter the creditor satisfied the balance of the loan and the bank released its security interest in the creditor's collateral. Since the creditor was insolvent, the debtor's trustee attempted to recover the preference payment from the bank. The court stated:
As the Bank saw the transaction on January 21, it was Ryan's agent for the purpose of collecting a check from Bonded's bank. It received nothing from Bonded that it could call its own; the Bank was not Bonded's creditor, and Ryan owed the Bank as much as ever. the Bank had no dominion over the $200,000 until January 31, when Ryan instructed the Bank to debit the account to reduce the loan;
Id. at 893-94 (Citations omitted). On this basis the court held that the bank was not an initial transferee but a conduit between Bonded and Ryan.
The Eleventh Circuit applied a control test in Nordberg v. Societe Generale (In re Chase & Sanborn, Corp.), 848 F.2d 1196 (11th Cir.1988), to determine whether a bank was an initial transferee or merely a conduit. The court held that a bank that had received funds from a debtor was a *308 mere conduit of the funds between the debtor and the bank's customer. The court arrived at this conclusion despite the fact that the bank had technically become its customer's creditor since the bank had honored a check drawn on the funds subsequently received from the debtor. The court held that the transaction in question should be viewed as one in which the bank allowed its customer to draw upon funds that were simultaneously deposited into the customer's account. Viewed in this way, the bank had no control over the funds whatsoever and could not be considered an initial transferee.
A control test was also applied by a district court in the Tenth Circuit. In In re Kaiser Steel Corp., 110 B.R. 514, a Colorado district court stated:
[The defendant] never held a beneficial interest in any [of the debtor's] stock, received no consideration for facilitating the conversion of its customers' stock, and had no ability to control the disposition of funds paid to its customers in the merger. It was simply a financial intermediary, not a "transferee."
Id. at 521. The alleged conduit and defendant, Charles Schwab & Co., Inc., was a discount brokerage house. Schwab had received funds from the debtor and distributed the funds to Schwab's customers as part of a stock redemption program. The bankruptcy court concluded that Schwab's status as a conduit or transferee should turn solely on agency principles. On this basis the bankruptcy court found that as an agent acting on behalf of an undisclosed or partially disclosed principle, Schwab could not be considered a conduit as a matter of law. The district court reversed the bankruptcy court's ruling because "Schwab's role in the stock redemption was almost identical to that of the securities clearinghouses and related entities who were earlier dismissed from the action." Id. at 520-21.
The court believes that Bonded, In re Chase & Sanborn, Corp. and In re Kaiser Steel Corp. are distinguishable from the present case. Unlike the conduits in those cases, the partnerships in the present case received something from Granada that they could call their own. They received funds with which they were able to reduce their liability to Key Bank. Unlike the situation in the cases discussed above, a debtor-creditor relationship did exist between Granada and the partnerships. Unlike the situation in those cases, the partnerships in the present case did have dominion over the funds received from Granada until payments were made to Key Bank.
The dominion and control test as set out in Bonded requires only that an entity have the "right to put the money to [its] own purposes." In the present case, the partnerships had the right and did, in fact, put the money to their own purposes. They used the funds to reduce their debt to Key Bank. In contrast, the conduits in Bonded and the cases following Bonded had no right, power, or claim of any kind to the funds transferred through them. The partnerships in the present case were simply not financial intermediaries and couriers in the same way as were the conduits in Bonded and the cases following it.
The bankruptcy court was concerned with the fact that Granada not only controlled the funds transferred to the partnerships but also controlled the disposition of the partnerships' funds. This fact, however, does not mean that the partnerships had no control over the money. The partnerships properly exercised control over the funds through Granada, their general partner. Granada's control over the funds was also the partnerships' control over the funds. The trustee has offered no persuasive reason why Granada should be treated as an entity foreign to the partnerships. To follow the trustee's reasoning would mean that partnerships would almost always be conduits of their general partners since general partners always control their partnerships. Such a rule would, in this court's opinion, go far beyond what the conduit theory was designed to accomplish.
Other tests developed in an effort to distinguish between a conduit and an initial transferee support this court's belief that the partnerships in the present case were *309 not conduits. Some courts have indicated that an entity is not a conduit if the entity is benefitted by the transfer of funds through it.[5] In In re Columbia Data Prod., Inc., 892 F.2d 26, the debtor made preference payments to a creditors committee which transferred the funds to a creditor named Logan. Logan transferred the funds to one of its creditors, Security Pacific Business Credit. Logan had previously assigned the funds to Security Pacific. The debtor's trustee attempted to recover the funds from Security Pacific as an initial transferee under § 550. The trustee argued among other things that Logan was a conduit since it "did not exercise dominion and control over the transfers. . . ." as required by Bonded. The trustee reasoned that Logan could not exercise control over the funds because it had assigned the funds. The Fourth Circuit disagreed:
Although Logan agreed to deposit the funds received from CDP (by way of the Committee) in the United Jersey account for ultimate transfer to Security Pacific, Logan used the funds for its own purpose to reduce its debt to Security Pacific. The fact that Logan could not have used the funds for other purposes does not affect this critical factor.
Id. at 29. The partnerships in the present case are, in all material respects, indistinguishable from Logan. For different reasons, neither Logan nor the partnerships had any practical control over the funds transferred through them. Logan had assigned the funds to Security Pacific. Just as the transfers from Granada to the partnerships altered the debts that existed between Granada and these entities, Logan's receipt of funds from the debtor altered the debt that existed between the debtor and Logan. Just as the partnerships used the funds for their own purposesto reduce their debts to Key BankLogan used the funds transferred through it to reduce its debt to Security Pacific.
The court in In re Colombian Coffee Co., 64 B.R. 585, also found it relevant that the alleged conduit was benefitted by the preference transfer.[6] In Metsch the debtor transferred a preference payment to the defendant bank, which was controlled by the debtor. The defendant transferred the payment to a second bank for the benefit of a corporation related to the debtor. The court refused to allow the debtor's trustee to recover the preference from the defendant. The court found that the bank was a conduit.
Although it may be argued that the decision can be based upon the control that the debtor exercised over the defendant bank, the court did not emphasize the control issue.[7] Rather the court found that the "defendant neither received nor retained any benefit from the $1.6 million transfer which is in question here other than its nominal banking charges." Id. at 586. The benefit received by the partnerships in the form of reduced debts to Key Bank is an important factor which distinguishes the present case from In re Colombian Coffee Co.
Several courts have indicated that the existence of a debtor-creditor relationship between the debtor and the alleged conduit is a relevant factor. In re Columbia Data Prod., Inc., 892 F.2d at 28 ("When a creditor receives money from its debtor to pay a debt, the creditor is not a mere conduit."); Bonded Fin. Serv. v. European Am. Bank, 838 F.2d at 893 (The alleged conduit "received nothing from [the debtor] that it could call its own; the [alleged conduit] was not [the debtor's] creditor. . . ."); In re *310 Chase & Sanborn, Corp., 848 F.2d at 1201 (Although the alleged conduit had technically become the debtor's creditor, "no real debtor-creditor relationship" existed.). In the present case, it is undisputed that a debtor-creditor relationship existed between Granada and the partnerships. This fact, among others, makes it difficult to view the partnerships as conduits.
A careful examination of the above cited and other related cases leads to the conclusion that the partnerships were initial transferees rather than conduits between Granada and Key Bank. The fact that many of the cases discussed above involve defensive rather than offensive uses of the conduit theory is of no consequence. An entity's status as a conduit should not change depending upon who asserts the theory. In fact, cases that assert the conduit theory defensively provide a useful perspective from which to view the present case. If the trustee had attempted to recover the preference from the partnerships rather than from Key Bank, any attempt by the partnerships to defend based on the conduit theory would be unavailing. Had that occurred, this court is of the opinion that the partnerships would be unsuccessful in arguing that they were innocent financial intermediaries or couriers against which a preference could not be recovered. For these same reasons the trustee should not be permitted to ignore the partnerships in his attempt to reach Key Bank.
One final factor persuades the court to reject the trustee's position: The trustee still has a way of reaching Key Bank under § 550. Section 550(a) indicates that the trustee is not limited to recovering the preference from the initial transferee. The trustee may recover from "any immediate or mediate transferee of such initial transferee" unless a subsequent transferee can demonstrate a defense under § 550(b). This means that Key Bank must disgorge the preference unless it can defend under § 550(b). This possibility eliminates the need to expand the conduit concept.
This court believes that the correct result will be reached if Key Bank is treated as a subsequent transferee. The bank should be required to account for the preference if it does not qualify for subsection (b) protection.
Accordingly, the bankruptcy court's order is HEREBY REVERSED AND REMANDED for a determination of whether the trustee may recover the preference payments from Key Bank as a subsequent transferee.
NOTES
[1] The bankruptcy court stated:
In particular, the partnerships' checkbooks were kept at Granada's place of business. All of the checks that were generated by the partnerships to CSB had Granada's address printed on them and were signed by its employees. Moreover, the partnerships' bank statements were sent to Granada's place of business, and its employees prepared the partnerships' financial reports, and maintained their checking account records and general ledgers. (citations omitted)
Id. at 706.
[2] Section 550(a) states:
Except as otherwise provided in this section, to the extent that a transfer is avoided under section 544, 545, 547, 548, 549, 553(b), or 724(a) of this title, the trustee may recover, for the benefit of the estate, the property transferred, or, if the court so orders, the value of such property, from
(1) the initial transferee of such transfer or the entity for whose benefit such transfer was made; or
(2) any immediate or mediate transferee of such initial transferee.
Id.
[3] Subsection (b) states:
The trustee may not recover under section (a)(2) of this section from
(1) a transferee that takes for value, including satisfaction or securing of a present of antecedent debt, in good faith, and without knowledge of the voidability of the transfer avoided; or
(2) any immediate or mediate good faith transferee of such transferee.
11 U.S.C.A. § 550(b) (West 1979).
[4] This court agrees with the bankruptcy court in In re Kaiser Steel Corp., 105 B.R. 639, 647 n. 11 (Bankr.D.Colo.1989), rev'd, 110 B.R. 514 (D.Colo.1989), aff'd on other grounds, Kaiser Steel Corp. v. Charles Schwab & Co., Inc., 913 F.2d 846 (10th Cir.1990), that good faith analysis should be restricted to § 550(b).
[5] A nominal benefit such as banking fees are normally ignored for purposes of this inquiry. Metsch v. City Nat'l Bank (In re Colombian Coffee Co.), 64 B.R. 585 (Bankr.S.D.Fla.1986). On the other hand, the trustee may be permitted to recover the fees retained, Commercial Recovery, Inc. v. Mill Street, Inc. (In re Mill Street, Inc.), 96 B.R. 268 (Bankr. 9th Cir.1989).
[6] In re Colombian Coffee Co. is factually similar to the present case in that the alleged conduit was controlled by the debtor rather than by the creditor.
[7] In fact, it appears that the court ignored the control issue entirely. The court stated that the bank's "role in this transfer was indistinguishable from that of the defendant Alabama bank in Metsch v. First Alabama Bank of Mobile (Colombian Coffee Co., Inc.) 59 B.R. 643 (Bkrtcy. S.D.Fla.1986)." In the Alabama case the debtor did not control the defendant bank.
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J-S84010-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
DONNA DRISCOLL : No. 1215 MDA 2017
Appeal from the Order Entered July 17, 2017
In the Court of Common Pleas of Schuylkill County Criminal Division at
No(s): CP-54-CR-0001788-2016
BEFORE: SHOGAN, J., LAZARUS, J., and OTT, J.
MEMORANDUM BY SHOGAN, J.: FILED APRIL 13, 2018
The Commonwealth appeals from the trial court’s pretrial order
granting Appellee Donna Driscoll’s pretrial motion and directing that the
offense of driving under the influence (“DUI”),1 which allegedly occurred on
June 15, 2016, be treated as a first offense. We reverse.
We summarize the pertinent history of this matter as follows. On
June 15, 2016, Officer Pete Sandor of the Tamaqua Police Department
responded to a report of a motor vehicle accident at 301 Willing Street in
Tamaqua Borough. Officer Sandor encountered Appellee at the scene and
subsequently arrested her. Appellee was charged with DUI. Upon
discovery, it was revealed that Appellee had previously been convicted of
____________________________________________
1 75 Pa.C.S. § 3802.
J-S84010-17
DUI, as evidenced in her driving record. Specifically, Appellee’s previous
conviction arose out of an offense that occurred in Schuylkill County on
April 2, 2006. Subsequently, on February 21, 2007, Appellee pled guilty to
the previous DUI offense and was sentenced to serve a term of incarceration
of three to six months.
After being charged in the instant matter, Appellee filed omnibus
pretrial motions on March 21, 2017. The trial court held a hearing on May 1,
2017. At the conclusion of the hearing, the trial court directed the parties to
file briefs addressing the issue of whether Appellee’s instant DUI offense
should be considered a first offense or a second offense pursuant to 75
Pa.C.S. § 3806. Appellee filed her brief on May 31, 2017, and the
Commonwealth filed its brief on June 5, 2017. On July 17, 2017, the trial
court entered its order determining that Appellee’s instant DUI offense
should be treated as a first offense. The Commonwealth then filed this
timely appeal.2 The trial court did not direct the Commonwealth to file a
____________________________________________
2 Pursuant to Pa.R.A.P. 311(d), in criminal cases the Commonwealth has a
right to appeal interlocutory orders if the Commonwealth certifies that the
orders will terminate or substantially handicap the prosecution.
Commonwealth v. Flamer, 53 A.3d 82, 86 n.2 (Pa. Super. 2012).
Specifically, Rule 311(d) provides as follows:
In a criminal case, under the circumstances provided by law, the
Commonwealth may take an appeal as of right from an order
that does not end the entire case where the Commonwealth
certifies in the notice of appeal that the order will terminate or
substantially handicap the prosecution.
(Footnote Continued Next Page)
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statement pursuant to Pa.R.A.P. 1925(b). On August 10, 2017, the trial
court directed that the certified record be forwarded to this Court and that
the record include the trial court’s order of July 17, 2017, in lieu of a trial
court opinion, thereby satisfying Pa.R.A.P. 1925(a).
The Commonwealth now presents the following issue for our review:
1. Did the lower court err in determining that 75 Pa.C.S.A.
§ 3806 is vague and must be subject to the rule of lenity,[3]
without addressing the rules of statutory construction, and thus
leniently interpreting § 3806 to define the 10–year lookback
period from offense date to offense date instead of conviction to
offense date?
(Footnote Continued) _______________________
Pa.R.A.P. 311(d).
Here, the record reflects that the Commonwealth stated in its notice of
appeal that “Attached hereto is the Commonwealth’s certification pursuant
to [Pa.R.A.P.] 311(d)”. Notice of Appeal, 8/3/17, at 1. However, review of
the certified record reflects that the Commonwealth failed to attach the
certification to the notice of appeal. Consequently, on August 22, 2017, this
Court filed an order directing the Commonwealth to show cause why the
appeal should not be quashed as taken from an unappealable order. Order,
8/22/17, at 1. On August 30, 2017, the Commonwealth filed its response to
the rule to show cause. Therein, the Commonwealth indicated that the trial
court’s order, which held the instant crime should be considered to be
Appellee’s first DUI, affected the grading of the instant offense because it
quashed the Commonwealth’s first-degree misdemeanor charge and limited
prosecution to the charge of DUI as an ungraded misdemeanor.
Commonwealth’s Response, 8/30/17, at 1-2. The Commonwealth certified
that the determination will substantially handicap the prosecution of the
case. Commonwealth’s Response, 8/30/17, at 2. Therefore, pursuant to
Pa.R.A.P. 311(d), this Court has jurisdiction to hear this appeal from the trial
court’s interlocutory order, even though the trial court’s order did not
terminate the prosecution.
3 See Commonwealth v. Jarowecki, 985 A.2d 955, 963 (Pa. 2009) (“‘rule
of lenity’- the mandate that ambiguous penal statutes be interpreted in
favor of the criminal defendant”) (emphasis added).
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J-S84010-17
Commonwealth’s Brief at 4.
The Commonwealth argues that the trial court erred in deciding that
Appellee’s instant DUI charge should be considered a first offense.
Commonwealth’s Brief at 7-15. Specifically, the Commonwealth contends
that 75 Pa.C.S. § 3806 is not vague with regard to calculating the ten-year
look-back period and that the trial court erred in applying the rule of lenity.
Our review of this case focuses upon the trial court’s interpretation of
a statute and its application of proper legal principles. These are questions
of law for which our standard of review is de novo and our scope of review is
plenary. Commonwealth v. Lynn, 114 A.3d 796, 817-818 (Pa. 2015). In
addition, we are mindful of the following:
Our task is guided by the sound and settled principles set
forth in the Statutory Construction Act, including the primary
maxim that the object of statutory construction is to ascertain
and effectuate legislative intent. 1 Pa.C.S. § 1921(a). In
pursuing that end, we are mindful that “[w]hen the words of a
statute are clear and free from all ambiguity, the letter of it is
not to be disregarded under the pretext of pursuing its spirit.” 1
Pa.C.S. § 1921(b). Indeed, “[a]s a general rule, the best
indication of legislative intent is the plain language of a statute.”
In reading the plain language, “[w]ords and phrases shall be
construed according to rules of grammar and according to their
common and approved usage,” while any words or phrases that
have acquired a “peculiar and appropriate meaning” must be
construed according to that meaning. 1 Pa.C.S. [§] 1903(a).
However, when interpreting non-explicit statutory text,
legislative intent may be gleaned from a variety of factors,
including, inter alia: the occasion and necessity for the statute;
the mischief to be remedied; the object to be attained; the
consequences of a particular interpretation; and the
contemporaneous legislative history. 1 Pa.C.S. § 1921(c).
Moreover, while statutes generally should be construed liberally,
penal statutes are always to be construed strictly, 1 Pa.C.S.
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J-S84010-17
§ 1928(b)(1), and any ambiguity in a penal statute should be
interpreted in favor of the defendant.
Notwithstanding the primacy of the plain meaning doctrine
as best representative of legislative intent, the rules of
construction offer several important qualifying precepts. For
instance, the Statutory Construction Act also states that, in
ascertaining legislative intent, courts may apply, inter alia, the
following presumptions: that the legislature does not intend a
result that is absurd, impossible of execution, or unreasonable;
and that the legislature intends the entire statute to be effective
and certain. 1 Pa.C.S. § 1922(1), (2). Most importantly, the
General Assembly has made clear that the rules of construction
are not to be applied where they would result in a construction
inconsistent with the manifest intent of the General Assembly. 1
Pa.C.S. § 1901.
Commonwealth v. Wilson, 111 A.3d 747, 751 (Pa. Super. 2015).
In addition, we observe that “[t]he title and preamble of a statute may
be considered in the construction thereof.” 1 Pa.C.S. § 1924. “The headings
prefixed to titles, parts, articles, chapters, sections and other divisions of a
statute shall not be considered to control but may be used to aid in the
construction thereof.” Id. The title of a statute “is in no sense conclusive,
particularly when there is no ambiguity in the body of the statute or
ordinance itself.” Commonwealth v. Reefer, 816 A.2d 1136, 1143 n.10
(Pa. Super. 2003) (quoting Commonwealth v. Campbell, 758 A.2d 1231,
1237 (Pa. Super. 2000)). “[T]he title cannot control the plain words of the
statute and…even in the case of ambiguity it may be considered only to
resolve the uncertainty.” Commonwealth v. Magwood, 469 A.2d 115,
119 (Pa. 1983) (internal quotation marks omitted).
-5-
J-S84010-17
Furthermore, the rule of lenity states, “[it] is axiomatic that . . . penal
statutes must be strictly construed, with ambiguities being resolved in favor
of the accused.” Commonwealth v. Rivera, 10 A.3d 1276, 1284 (Pa.
Super. 2010). However, as we noted earlier, the rule of lenity is applicable
only when the penal statute has been determined to be ambiguous.
Jarowecki, 985 A.2d at 963.
The statutory provision at issue here provides as follows:
§ 3806. Prior offenses.
(a) General rule.— Except as set forth in subsection (b), the
term “prior offense” as used in this chapter shall mean any
conviction for which judgment of sentence has been imposed,
adjudication of delinquency, juvenile consent decree, acceptance
of Accelerated Rehabilitative Disposition or other form of
preliminary disposition before the sentencing on the present
violation for any of the following:
(1) an offense under section 3802 (relating to
driving under influence of alcohol or controlled
substance);
(2) an offense under former section 3731;
(3) an offense substantially similar to an offense
under paragraph (1) or (2) in another jurisdiction; or
(4) any combination of the offenses set forth in
paragraph (1), (2) or (3).
(b) Timing.—
(1) For purposes of sections 1553(d.2) (relating to occupational
limited license), 1556 (relating to ignition interlock limited
license), 3803 (relating to grading), 3804 (relating to penalties)
and 3805 (relating to ignition interlock), the prior offense must
have occurred:
-6-
J-S84010-17
(i) within 10 years prior to the date of the offense
for which the defendant is being sentenced; or
(ii) on or after the date of the offense for which the
defendant is being sentenced.
(2) The court shall calculate the number of prior offenses, if
any, at the time of sentencing.
(3) If the defendant is sentenced for two or more offenses in
the same day, the offenses shall be considered prior offenses
within the meaning of this subsection.
75 Pa.C.S. § 3806.
In reviewing the application of the statute, the trial court offered the
following analysis:
On May 25, 2016, the Pennsylvania Legislature amended
75 Pa.C.S. § 3806. . . . The amendment completely changed
subsection (b) and removed the former subsection (b)’s
reference to a conviction, replacing it with reference to the date
of the offense. Furthermore, the amendment completely
removed reference to section 3802, the offense of driving under
the influence, from subsection (b), as well as former section
3731, which had been repealed some time ago. The references
to sections 3803 and 3805, relating to grading and penalties of
section 3802 offenses respectively, remained intact.
We have researched the legislative history of this
amendment and have found not one whiff of the legislature’s
intent in making the revisions to subsection (b). This change
appears to have been made sometime between 2015 and when
the bill was finally passed in 2016. None of the legislative
remarks refers to this change. The primary purpose of the 2016
amendments was to overhaul the occupational limited license
and created the new ignition interlock license.
The Commonwealth argues that 3806(a) clearly states that
an offense under section 3802 is to be calculated from the prior
conviction, and the date of the conviction on that prior offense
was [February 21, 2007], making this a second offense.
[Appellee] takes the position that under section 3806(b), which
-7-
J-S84010-17
controls as an exception to 3806(a), the date of the offense,
[April 2, 2006], was more than ten years from the date of the
second offense on June 15, 2016. [Appellee] argues in her brief
that the amendment was probably passed to avoid the timing
issues that arise when a defendant seeks continuances in order
to avoid a second offense being calculated within ten years of a
prior conviction. No case law or legislative history is cited to
support that proposition.
Whatever the reason, the Pennsylvania Legislature has
written a law that is unclear and that cannot be deciphered,
regardless of whether the statutory language is given its plain
meaning or is read to give effect to all of its provisions. We
agree with [Appellee] that section 3806 must be strictly
construed pursuant to 1 Pa.C.S. § 1928(b)(1) and that we must
apply the rule of lenity. . . .
We have reviewed the statute and conclude that the
apparent inconsistency in that language of the statute appears
impenetrable. Where the law is not clear, so that a citizen may
know the terms of any such law, the law must be interpreted to
favor the citizen. We, therefore, hold that [Appellee’s] position
that the offense is a first offense is correct, when timed by the
date of the offense and not by the date of conviction. The
citizens of the Commonwealth should not find themselves
oppressed by the failure of the Pennsylvania Legislature to enact
clearly written legislation.
Trial Court Order, 7/17/17, at 1-4. We are constrained to disagree.
Our review of the statute reflects that the current version of Section
3806 was enacted by the General Assembly on May 25, 2016. Subsection
(a) sets forth the following general rule defining the term “prior offense” as
follows: “Except as set forth in subsection (b), the term ‘prior offense’ as
used in this chapter shall mean any conviction for which judgment of
sentence has been imposed . . .” 75 Pa.C.S. § 3806(a) (emphasis
added). Thus, the plain language of the statute instructs that a “prior
-8-
J-S84010-17
offense” is a judgment of sentence imposed on a conviction. Hence, the
entry of a judgment of sentence on a conviction is the triggering mechanism
for a crime to amount to a “prior offense.” Consequently, there is no “prior
offense” without the entry of a judgment of sentence on a conviction.
Subsection (a) sets forth the convictions for which the term “prior offense” is
applicable. In summary, under subsection (a), a “prior offense” pertains to
violations of the current or former DUI statutes, whether a violation of
Pennsylvania law or substantially similar laws of another state law.
Therefore, under the general rule set forth in subsection (a), any prior DUI
conviction for which a judgment of sentence has been imposed during an
offender’s entire lifetime qualifies as a “prior offense.”
However, as stated in subsection (a), subsection (b) sets forth
exceptions to the term “prior offense” as defined in subsection (a).
Subsection (b), which is titled “Timing,” explains that for the purposes of
grading (75 Pa.C.S. § 3803) and penalties (75 Pa.C.S. § 3804) the “prior
offense,” i.e., the judgment of sentence on a conviction, must have occurred
within a delineated timeframe or look-back period. Specifically, the statute
instructs that for purposes of grading and penalties, a “prior offense” is not
“any conviction for which judgment of sentence has been imposed,” 75
Pa.C.S. § 3806(a) (emphasis added), but is limited to a conviction that
occurred within ten years prior to the date of the offense for which the
defendant is currently being sentenced. 75 Pa.C.S. 3806(b)(1)(i). This
-9-
J-S84010-17
language of subsection (b) does nothing more than specify the timeframe
and look-back period to be used in calculating the number of prior DUI
offenses. Subsection (b) contains no language that changes the subsection
(a) definition of “prior offense” from being the entry of the judgment of
sentence on a conviction to the actual date of the prohibited conduct.
Accordingly, we are constrained to conclude that the trial court erred in
determining that the statute is ambiguous. Consequently, the trial court
also erred in applying the rule of lenity to this unambiguous statute.
Therefore, we reverse the order of the trial court and remand this case for
further proceedings.
Order reversed. Case remanded for further proceedings. Jurisdiction
relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/13/2018
- 10 -
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661 F.2d 920
Gallaspiev.Shields
80-6805
UNITED STATES COURT OF APPEALS Fourth Circuit
5/11/81
1
E.D.Va.
AFFIRMED
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956 F.2d 1163
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.William Lee WRIGHT, Defendant-Appellant.
No. 90-5116.
United States Court of Appeals, Fourth Circuit.
Submitted Oct. 11, 1991.Decided March 5, 1992.
Appeal from the United States District Court for the Middle District of North Carolina, at Winston-Salem. Frank W. Bullock, Jr., District Judge. (CR-90-166-WS)
Barry Stephen Stanback, Stanback & Stanback Attorneys, P.A., Greensboro, N.C., David F. Tamer, WinstonSalem, N.C., for appellant.
Robert H. Edmunds, Jr., United States Attorney, Paul A. Weinman, Assistant United States Attorney, Greensboro, N.C., for appellee.
M.D.N.C.
AFFIRMED.
Before PHILLIPS, WILKINS and NIEMEYER, Circuit Judges.
OPINION
PER CURIAM:
1
William Lee Wright signed a plea agreement with the government in which he agreed to plead guilty to two counts of a three count indictment. Two months later, on the day the sentencing hearing was scheduled, Wright filed a motion to withdraw his guilty plea, alleging he was frightened and unaware of his actions when he entered the plea. The district court denied the motion and sentenced him for the two charges to which he pled guilty. Wright appeals, contending that the district court abused its discretion in denying his motion to withdraw his guilty plea. We find no merit to Wright's contentions; consequently, we affirm his convictions.
2
There is no absolute right to withdraw a guilty plea, even before sentencing. United States v. Moore, 931 F.2d 245, 248 (4th Cir.1991). Rule 32(d) of the Federal Rules of Criminal Procedure provides that when a defendant moves for withdrawal of a guilty plea before sentencing, the court may allow the defendant to withdraw the plea if he demonstrates a "fair and just reason" for the withdrawal. The defendant bears the burden of proof. United States v. Haley, 784 F.2d 1218 (4th Cir.1986).
3
A district court's denial of a defendant's motion to withdraw his guilty plea must be sustained if the court did not abuse its discretion in reaching its decision. United States v. Pitino, 887 F.2d 42, 46 (4th Cir.1989). Courts consider many factors to determine whether a defendant has established a fair and just reason for withdrawing his guilty plea: (1) whether the defendant provided credible evidence that his plea was not knowing or voluntary; (2) whether the defendant credibly asserted his legal innocence; (3) whether there was a delay between entering the plea and moving for withdrawal; (4) whether defendant had close assistance of counsel; (5) whether withdrawal will prejudice the government; and (6) whether withdrawal will inconvenience the court and waste judicial resources. Moore, 931 F.2d at 248. In this case, none of these factors support Wright's contention that the district court abused its discretion by denying his motion to withdraw his guilty plea.
4
First, the district court found that Wright's guilty plea was "knowingly and understandingly made." When Wright entered the guilty plea, the district court explained the penalties attached to the counts for which he pled guilty. His attorney also testified that he had explained the charges and penalties to Wright. Wright claimed that he misunderstood the possible sentence and entered a guilty plea out of fear.* The district court found these claims unconvincing, especially in light of Wright's familiarity with the judicial process due to his prior criminal charges.
5
Second, Wright did not attempt to assert his legal innocence. After he moved to withdraw his guilty plea, the court asked Wright whether he was asserting that he was not guilty of the crimes to which he pled guilty. Wright replied "I'm not saying that at all."
6
Third, Wright entered his guilty plea on September 7, 1990, but it was not until November 9, 1990, the day Wright was scheduled to be sentenced, that he moved to withdraw the plea. Thus, there was a two month delay between Wright's guilty plea and his request to withdraw the plea.
7
Fourth, Wright failed to meet his burden of showing that his counsel's performance was not reasonable. Wright claimed that his attorney had misinformed him about the charges and the possible sentences he faced. The attorney stated that he believed he had correctly advised Wright about the charges and the sentences. The district court did not abuse its discretion in finding that Wright's attorney gave him correct information about the law.
8
Fifth, there was evidence that the government would be prejudiced if Wright was permitted to withdraw his guilty plea. The police officer who had arrested Wright was available as a witness in September when Wright entered his guilty plea, but the officer subsequently left the police department and was living out of state. The court reasonably concluded that the government could be prejudiced if it was unable to locate the arresting officer.
9
Finally, withdrawal of the guilty plea in this case would result in inconvenience to the court and waste judicial resources. Wright did not deny his guilt for the counts to which he pled guilty. Reopening the plea in this case would further postpone but likely would not change the end result.
10
The evidence in this case reveals that the district court did not abuse its discretion in concluding that Wright failed to demonstrate a fair and just reason for withdrawing his guilty plea. Accordingly, we affirm the district court's denial of Wright's motion to withdraw his guilty plea.
11
We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the Court and argument would not aid the decisional process.
12
AFFIRMED.
*
A defendant's entry of a guilty plea out of fear of a greater sentence does not render the plea involuntary. North Carolina v. Alford, 400 U.S. 25 (1970)
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Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
1-19-2007
Goodrich v. Clinton Cty Prison
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-3741
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 04-3741
JERVIS LAVERN GOODRICH,
Appellant,
v.
CLINTON COUNTY PRISON; LYCOMING-CLINTON “MHMR”;
LAURA LEE, employed by MHMR, contracted by Clinton County Prison
as a mental health counselor; WARDEN DURAN, at Clinton County Prison;
DEPUTY WARDEN MOTTER, at Clinton County Prison; DEBRA DUFFY,
Appellees.
__________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(03-1469)
District Judge: Honorable Sylvia Hilda Rambo
Argued November 27, 2006
____________
Before: FUENTES and GARTH, Circuit Judges, and POLLAK, District Judge 1
(Opinion Filed: January 19, 2007)
Carolyn F. Corwin
Jeffrey H. Lerner [Argued]
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
Counsel for Appellant
1
The Honorable Louis H. Pollak, Senior District Judge for the Eastern District of
Pennsylvania, sitting by designation.
Joseph P. Green
Lee, Green & Reiter, Inc.
115 East High Street
P.O. Box 179
Bellefonte, PA 16823
Counsel for Appellees
OPINION
____________________
Garth, Circuit Judge:
On August 25, 2003, Jervis Lavern Goodrich, an inmate, filed a pro se civil rights
complaint, pursuant to 42 U.S.C. § 1983, claiming that prison health workers and prison
officials were deliberately indifferent to his serious medical needs in violation of his rights
under the Eighth Amendment to the United States Constitution. App. 24, 27. Goodrich also
moved for appointment of counsel. App. 134. The defendants–Clinton County;2 Lycoming-
Clinton County Mental Health and Mental Retardation Program (“MHMR”); Clinton County
Prison (“CCP”) mental health counselor Lauralee Dingler;3 CCP Warden Duran; CCP
Deputy Warden Motter; and Lycoming-Clinton County MHMR Director Debra Duffy–filed
a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. App. 65.
After Goodrich filed an opposition, the District Court ordered, on July 21, 2004, that
2
In his complaint, Goodrich named Clinton County Prison as a defendant. Defendants
clarified, and Goodrich agreed, that his intention was to state a cause of action against Clinton
County.
3
Goodrich initially listed this defendant as “Laura Lee.” Defendants have identified her as
Lauralee Dingler, an employee of Lycoming-Clinton MHMR.
2
the motion be converted into a motion for summary judgment, interpreting Goodrich’s
opposition to contain statements contrary to allegations in the complaint. App. 159. The
District Court allowed the parties 20 days to file affidavits or supplemental documents
pertinent to the summary judgment motion. Shortly after Goodrich filed such documents, the
District Court denied his request for appointment of counsel. App. 16. Defendants then
requested, and the District Court granted, a ten-day extension to file a supplemental brief and
affidavits. App. 166, 170. On September 7, 2004, the District Court granted summary
judgment to defendants (hereinafter “appellees”). App. 7. The parties took no discovery prior
to the grant of summary judgment.
On September 20, 2004, Goodrich filed a timely notice of appeal, and on December
7, 2005, this Court appointed counsel for Goodrich on appeal.4 App. 1, 6b. Goodrich
contends both that the grant of summary judgment was erroneous because there were genuine
issues of material fact on the issue of appellees’ deliberate indifference, and that the grant
of summary judgment was premature, because he was afforded no meaningful opportunity
to conduct discovery. He further maintains that the grant of summary judgment should be
vacated, because the District Court abused its discretion in denying his requests for
appointment of counsel. Lastly, Goodrich argues that if this Court reverses or vacates the
grant of summary judgment, it should order the District Court to appoint counsel on remand.
Appellees’ position is that there was no error in the District Court’s decision to grant
4
We commend pro bono counsel for their efforts on behalf of the appellant.
3
summary judgment and no abuse of discretion in its denial of the motion to appoint counsel,
but that if this Court should reverse or vacate the grant of summary judgment, this Court
should not order that counsel be appointed on remand and should preclude Goodrich from
arguing on remand that he suffered a “physical injury” within the meaning of the Prison
Litigation Reform Act. See 42 U.S.C. § 1997e(e). Goodrich argues that this latter issue
should be left for the District Court to decide in the first instance.
For the following reasons, we will affirm the grant of summary judgment and the
denial of the motion to appoint counsel.
I
Soon after arriving at CCP on September 11, 2002 on charges relating to conspiracy
to manufacture methamphetamine, Goodrich requested mental health treatment. On
September 19, he met with Lauralee Dingler, a Case Manager for Lycoming-Clinton County
MHMR, an entity which provides mental health counseling to inmates at CCP. App. 179.
Goodrich explained to Dingler that he suffered from bipolar disorder and severe depression,
and told her what medications he had been taking. App. 92. She asked how he was feeling,
and Goodrich informed her that he was “very depressed and . . . having rapid moodswings,”
making him “feel completely unstable.” App. 92. Upon Dingler’s request, Goodrich signed
a release permitting CCP to obtain medical records from the psychiatrist who treated him
prior to his incarceration. He also gave Dingler the phone number for Bradford County
Prison, where he had previously been incarcerated, so that she could call “to verify that [he]
4
must receive medications while incarcerated.” App. 92.
Two days later, Goodrich made a second request for medication. He also notified an
unidentified prison officer that he had not yet received a response from Dingler. App. 92.
Dingler met with Goodrich again on October 9. App. 92, 179. Goodrich told her that
he had been “bouncing off the walls of my cell with crazy thoughts” and “hidding [sic] from
inmates and staff because I don’t know how to take them and [am] worried how I might
react.” App. 93. Dingler told him that she had spoken with his psychiatrist, who told her that
Goodrich had been self-medicating, leading the psychiatrist to discontinue Goodrich’s
prescriptions. App. 93, 190. Goodrich responded that he had missed doses in the past, but
that it was impossible to miss doses in prison. Dingler responded that he did not need
medication, and that “everyone who comes to jail suffers from some form of depression or
another.” App. 93. He told her that his “disorders are disabling,” and that he received
disability checks from the Social Security Administration because of his mental illness. App.
93. She said that she “speak[s] with the gaurds [sic] from time to time, they know what to
watch for and nothings [sic] been said about you.” App. 93.
A month or two later, Goodrich informed Deputy Warden Motter that “mental health
is refusing to give [him] the proper medication.” App. 94. When Motter instructed Goodrich
to “put in a request to the doctor,” Goodrich informed her that he already had, but had
received “no answer.” App. 94. Goodrich also said he had “put in at least 6 requests [to
mental health], [but] she [Dingler] won’t answer any of them, and furthermore, she doesn’t
5
do her job.” App. 94. Motter told Goodrich she would “check into it.” App. 94.
In early 2003, Goodrich was appointed a new defense counsel in connection with his
criminal case, which had been transferred from state to federal prosecution. Goodrich
notified his new counsel that he had not been given medication. App. 94. In February 2003,
at a hearing before Magistrate Judge Askey in connection with the criminal case, Goodrich’s
defense counsel informed the court that Goodrich was not being given medication for his
mental illnesses. In an order dated February 26, 2003, Magistrate Judge Askey
“recommend[ed] that the U.S. Marshal apprise the detaining authorities of [Goodrich’s]
reported history of depression and bipolar personality disorder, and ensure that appropriate
care is provided.” App. 103. He further “recommend[ed] that [Goodrich] be evaluated by a
mental health professional and provided with any treatment recommended by that mental
health professional.” App. 103-04.
In response to the magistrate judge’s recommendation, Dingler met with Goodrich
again on March 14 and March 17, 2003. App. 94, 179. She conducted an evaluation in which
she observed, inter alia, that Goodrich “did not appear to act in a delusional or bizzare
manner nor did he display any pressured speech.” App. 179. Dingler concluded that Goodrich
did not “display[] clinical symptoms which would warrant a referral to the Psychiatrist for
medications,” and she “believed that Mr. Goodrich was displaying characteristics of ‘drug
seeking.’” App. 179.
Goodrich subsequently appeared before District Judge Jones in connection with his
6
criminal case, and expressed his frustration at his inability to obtain medication. App. 94-95.
At the request of Judge Jones, Goodrich’s counsel communicated with the psychiatrist who
had treated Goodrich prior to his incarceration. In a letter dated April 8, 2003, the psychiatrist
confirmed that he had diagnosed Goodrich as suffering from bipolar II disorder, for which
“[a]ppropriate treatment would include a mood stabilizing medication in combination with
an antidepressant.” App. 110. On April 21, 2003, Goodrich’s counsel forwarded this letter
to Supervisory Deputy U.S. Marshal James Cunfer, along with a cover letter explaining that
Magistrate Judge Askey had requested that “Goodrich be seen by a physician [but] [t]his was
not done.” App. 109.5
Goodrich made written requests “to see someone in mental health about medication
for severe depression and bipolar disorder” on April 7, April 8, April 24, and April 28. App.
106-107. During this period, he experienced problems with the prison staff and had
altercations with inmates, leading him to receive 60 days “in the hole.” App. 95. He wrote
to Warden Duran to “explain what was happening and tell[] him if I had my medication that
mental health refuse[s] to give me, I wouldn’t be in the hole or causing problems.” App. 95.
Duran did not respond. App. 95.
In late April or early May 2003, Goodrich was taken to see a doctor. It is not clear
from the record whether this doctor was a psychiatrist. App. 161. The doctor prescribed
Paxil, although Goodrich told him that Paxil would not help. App. 161.
5
Actually, Magistrate Judge Askey recommended that Goodrich be seen by a “mental
health professional.” See App. 104.
7
When Goodrich told his lawyer that he had been placed on Paxil but not on mood
stabilizers, his lawyer responded that “it[’]s time to get you out of there, Judge Jones said we
can’t proceed any further with your case untill [sic] your [sic] stable enough to make a
rational decisions [sic].” App. 96. A few days later, Goodrich was transferred to Snyder
County Prison.
At Snyder County Prison, Goodrich underwent a mental health evaluation where he
was diagnosed with attention-deficit hyperactivity disorder and bipolar disorder, and was
placed on medication. App. 96.
II
We exercise de novo review of a district court’s grant of summary judgment. See, e.g.,
Hugh v. Butler County Family YMCA, 418 F.3d 265, 266 (3d Cir. 2005). Summary judgment
is appropriate only where the moving party has shown that there is no genuine dispute of
material fact and that it is entitled to judgment as a matter of law. See Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Fed. R. Civ. P. 56(c). “Summary judgment . . . must not
be granted where there is a genuine dispute about a material fact, ‘that is, if the evidence is
such that a reasonable jury could return a verdict for the nonmoving party.’” Fasold v.
Justice, 409 F.3d 178, 183 (3d Cir. 2005) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986)). In determining whether there exists a genuine dispute as to a material fact,
we resolve all ambiguities and draw all reasonable inferences in favor of the non-moving
party. See, e.g., Regents of Mercersburg College v. Republic Franklin Ins. Co., 458 F.3d 159,
8
163 (3d Cir. 2006).
We review a district court’s decision to deny appointment of counsel under 28 U.S.C.
§ 1915(e)(1) for abuse of discretion. See Tabron v. Grace, 6 F.3d 147, 158 (3d Cir. 1993).
III
Goodrich claims that the District Court erred in granting summary judgment to
appellees on his § 1983 claim that appellees violated his rights under the Eighth Amendment
to the United States Constitution. He argues that he presented sufficient evidence 6 from
which a reasonable jury could conclude that Dingler, Duran, Motter, and Duffy were
deliberately indifferent to his serious medical needs and that Clinton County and Lycoming-
Clinton County MHMR had a policy or custom of denying prisoners treatment for mental
illnesses.
A prison official’s deliberate indifference to an inmate’s serious medical needs
constitutes a violation of the Eighth Amendment and states a cause of action under § 1983.
See, e.g., Estelle v. Gamble, 429 U.S. 97, 104-05 (1976). The Eighth Amendment claim has
objective and subjective components. First, the prisoner must show that his medical need is,
objectively, “sufficiently serious.” Farmer v. Brennan, 511 U.S. 825, 834 (1997) (citation
omitted). Second, he must establish that the prison official acted with subjective deliberate
6
Goodrich argues in the alternative that to the extent he did not present sufficient
evidence to survive the summary judgment motion, it was a result of the denial of his motion to
appoint counsel. This argument is indistinguishable from his claim that the District Court’s
denial of that motion was an abuse of discretion, which we discuss and reject infra.
9
indifference, that is, that the official was aware of a substantial risk of serious harm to the
prisoner but disregarded that risk by failing to take reasonable measures to abate it. Farmer
v. Brennan, 511 U.S. 825, 837 (1994).
A medical need qualifies as “serious” for purposes of Eighth Amendment analysis if,
for example, “it is one that has been diagnosed by a physician as requiring treatment.”
Monmouth County Corr. Institutional Inmates v. Lanzaro, 834 F.2d 326, 347 (3d Cir. 1987)
(quotation and citation omitted). In addition, “if unnecessary and wanton infliction of pain
results as a consequence of denial or delay in the provision of adequate medical care, the
medical need is of the serious nature contemplated by the eighth amendment.” Id. (quotation
and citation omitted). A mental illness may constitute a serious medical need. Inmates of the
Allegheny County Jail v. Pierce, 612 F.2d 754, 763 (3d Cir. 1979) (“Although most
challenges to prison medical treatment have focused on the alleged deficiencies of medical
treatment for physical ills, we perceive no reason why psychological or psychiatric care
should not be held to the same standard.”).
An inmate can show “deliberate indifference” where, for example, “prison authorities
deny reasonable requests for medical treatment . . . and such denial exposes the inmate to
undue suffering.” Lanzaro, 834 F.2d at 346 (quotation and citation omitted). Alternatively,
“deliberate indifference” is shown “where knowledge of the need for medical care [is
accompanied by the] . . . intentional refusal to provide that care” or where “prison authorities
prevent an inmate from receiving recommended treatment for serious medical needs or deny
10
access to [a] physician capable of evaluating the need for such treatment.” Id. at 346-47
(quotations and citations omitted). It is clear, however, that allegations of negligence do not
rise to the level of a constitutional violation. Estelle, 429 U.S. at 106. Finally, “whether or
not a defendant’s conduct amounts to deliberate indifference has been described as a classic
issue for the fact finder.” A.M. ex. rel. J.M.K. v. Luzerne County Juvenile Detention Ctr., 372
F.3d 572, 588 (3d Cir. 2004) (quoting Nicini v. Morra, 212 F.3d 798, 816 (3d Cir. 2000)
(Rendell, J., dissenting)).
We are satisfied that Goodrich has presented evidence of a “serious” medical need.
His mental illnesses were diagnosed by psychiatrists as requiring treatment, both prior to his
incarceration at CCP and immediately after his transfer to Snyder County Prison. App. 92,
96, 110, 112-14. In addition, Goodrich provided a vivid description of his suffering during
the period when he was not medicated. See, e.g., App. 25, 92-93, 95 (characterizing this time
as “8 months of mental torture” during which he “felt like [he] was losing control of [his]
thoughts,” was “very paranoid,” and “completely shut down and [he] couldn’t do anything
about it . . . [He] just staired [sic] for days on end.”). From this evidence, a reasonable fact
finder could conclude that the period when he was denied medication resulted in an
“unnecessary and wanton infliction of pain,” thus qualifying his medical needs as “serious.”
Lanzaro, 834 F.2d at 347. See also Pierce, 612 F.2d at 763 (noting the possibility that “the
failure to provide necessary psychological or psychiatric treatment to inmates with serious
mental or emotional disturbances will result in the infliction of pain and suffering just as real
11
as would result from the failure to treat serious physical ailments”).
However, the District Court was correct to conclude that appellees demonstrated that
Goodrich had failed to show a genuine issue of material fact on the issue of Lauralee
Dingler’s “deliberate indifference.” The undisputed evidence shows that after Goodrich
informed Dingler of his diagnoses at their first meeting on September 19, 2002, she
communicated with his pre-incarceration psychiatrist who told her that he had discontinued
Goodrich’s medication because Goodrich had been “self-medicating.” App. 93, 109. In light
of this information, Dingler told Goodrich on October 9, 2002, that she had determined that
medication was unnecessary, and that Goodrich’s depression was merely characteristic of
someone facing a period of incarceration. App. 93. After the Magistrate Judge, on February
26, 2003, “recommend[ed] that [Goodrich] be evaluated by a mental health professional,”
Dingler again met with Goodrich on March 14 and March 17, 2003. App. 103-04, 94, 178-
81. From these meetings, she concluded that Goodrich did not “display[] clinical symptoms
which would warrant a referral to the Psychiatrist for medications” and instead, that
Goodrich was “displaying characteristics of ‘drug seeking.’” App. 179.
We conclude that there is no dispute about any material fact sufficient to preclude a
grant of summary judgment for Dingler. There is no dispute that Dingler, upon consultation
with Goodrich’s physician, learned that Goodrich had abused his prescription by self-
medicating. Further, there is no dispute that Dingler engaged in a good-faith clinical
assessment of Goodrich’s symptoms, concluding on several visits that his condition did not
12
warrant medication. Taken together, Dingler’s consultation with Goodrich’s physician and
her clinical assessment of Goodrich clearly indicate an exercise of medical judgment, rather
than deliberate indifference to his medical needs.
Deliberate indifference is a subjective standard, based on a defendant’s state of mind:
the undisputed fact that Dingler took the aforementioned steps to evaluate and treat
Goodrich’s mental illness precludes a finding that she wilfully ignored a substantial risk of
harm. While her ultimate decision might have been negligent or erroneous, there is no
indication that Dingler’s mind was sufficiently culpable to constitute deliberate indifference.
IV
Next, Goodrich argues that CCP Warden Duran, CCP Deputy Warden Motter, and
Lycoming-Clinton County MHMR Director Duffy were deliberately indifferent to his serious
medical needs. He finds liability here under three distinct theories: (1) as supervisors of
Dingler; (2) their personal involvement in denying him treatment for his mental illnesses; and
(3) as policymakers responsible for establishing or maintaining the policies or customs that
caused a violation of his constitutional rights.
First, while a supervisor may be personally liable under § 1983 “if he or she
participated in violating the plaintiff’s rights, directed others to violate them, or, as the person
in charge, had knowledge of and acquiesced in his subordinates’ violations,” A.M., 372 F.3d
at 586, as this Court has already found Goodrich’s allegations insufficient to establish that
13
Dingler violated Goodrich’s Eighth Amendment rights, these same allegations cannot
establish that Dingler’s supervisors violated his rights.
Secondly, as for his claim of liability based on personal involvement, none of
Goodrich’s submissions contain any allegations respecting Duffy, and thus summary
judgment in Duffy’s favor on this theory was proper. In addition, the only allegations
respecting Duran and Motter were that Goodrich communicated to them that he was not
getting the medication he said he needed and that Dingler was unresponsive to his requests.
However, as the District Court explained, non-physician defendants cannot be “considered
deliberately indifferent simply because they failed to respond directly to the medical
complaints of a prisoner who was already being treated” by the prison’s medical staff.
Durmer v. O’Carroll, 991 F.2d 64, 69 (3d Cir. 1993). Because the prison’s medical staff,
through Dingler, was providing medical consultation and evaluation, Duran and Motter
cannot be considered deliberately indifferent for failing to second-guess the medical staff’s
appraisal of the situation.
Finally, Goodrich’s claims against Duffy, Duran, and Motter based on their role as
policymakers depends on the viability of Goodrich’s claims against Clinton County and
Lycoming-Clinton County MHMR. Goodrich argues that the District Court was in error in
dismissing his claims against Clinton County and Lycoming-Clinton County MHMR because
he presented sufficient evidence that Clinton County and Lycoming-Clinton County MHMR
had a policy or custom of deliberate indifference to prisoners’ serious mental illnesses. These
14
municipal entities may be liable based on a suit brought pursuant to § 1983 only if “the
alleged constitutional transgression implements or executes a policy, regulation or decision
officially adopted by the governing body or informally adopted by custom.” Beck v. City of
Pittsburgh, 89 F.3d 966, 971 (3d Cir. 1996) (citation omitted). Here, however, Goodrich has
not sufficiently alleged any constitutional transgression. Without a violation of his
constitutional rights, Clinton County and Lycoming-Clinton County MHMR of course cannot
be liable based on the theory that they established or maintained an unconstitutional policy
or custom responsible for violating his rights. It follows, then, that Duffy, Duran, and Motter
cannot be liable as policymakers.
V
Goodrich next maintains that the grant of summary judgment should be vacated
because he was given no meaningful opportunity to conduct discovery. He argues that the
20 days the District Court granted the parties to submit materials pertinent to the newly-
converted motion for summary judgment was an insufficient amount of time for him to
engage in meaningful discovery. However, Goodrich did not raise this issue in the District
Court, and although we have discretion to address issues not raised below, we do so only
“when prompted by exceptional circumstances.” Tabron, 6 F.3d at 153 n.2 (quotations and
citation omitted). We find no exceptional circumstances here and decline to address this
issue.
15
VI
Lastly, Goodrich argues that the District Court’s denial of his motion to appoint
counsel was in error. While there is no constitutional or statutory right to counsel in a civil
case, see e.g., Parham v. Johnson, 126 F.3d 454, 456-57 (3d Cir. 1997) (collecting cases),
the court “may request an attorney to represent any person unable to afford counsel.” 28
U.S.C. § 1915(e)(1). Such appointment is a discretionary decision, and as such we review the
District Court’s denial of Goodrich’s motion to appoint counsel for abuse of discretion.
Tabron, 6 F.3d at 157-58 (“We emphasize that appointment of counsel remains a matter of
discretion; section [1915(e)(1)] gives district courts broad discretion to determine whether
appointment of counsel is warranted, and the determination must be made on a case-by-case
basis.”).
In Tabron, we identified a number of factors a district court should consider in
determining whether to appoint counsel. First, the court should make a threshold
determination of whether “the plaintiff’s claim has arguable merit in fact and law.” Tabron,
6 F.3d at 155. If the case has arguable merit, the court should proceed to consider (i) the
plaintiff’s ability to present his own case; (ii) the complexity of the legal issues; (iii) the
degree to which factual investigation will be necessary and the ability of the plaintiff to
pursue such investigation; (iv) the extent to which a case is likely to turn on credibility
determinations; (v) whether the case will require testimony of expert witnesses; and (vi)
whether the plaintiff can afford and attain counsel on his own. See Parham, 126 F.3d at 457-
16
58 (citing Tabron, 6 F.3d at 155-56, 157 n.5). This list of factors is not exhaustive.
Here, after assuming “solely for the purpose of deciding this motion, that [Goodrich’s
claim] has arguable merit,” the District Court proceeded to find that the Tabron factors
weighed against appointment. App. 18. The District Court explained that because Goodrich
had demonstrated that he was capable of “presenting comprehensible arguments,” and
because the “legal issues are relatively uncomplicated,” Goodrich would not “suffer
prejudice if he is forced to prosecute this case on his own.” App. 18.
We agree with the District Court’s analysis and conclusion, and we thus hold that the
District Court did not abuse its discretion here.
CONCLUSION
For the foregoing reasons, both the District Court’s order granting summary judgment
and the District Court’s order denying the motion to appoint counsel will be affirmed.
17
18
POLLAK, District Judge, dissenting in part:
I agree with the court that the District Court’s grant of summary judgment in favor of
defendant-appellees Clinton County, Lycoming-Clinton County Mental Health and Mental
Retardation Program (MHMR), MHMR director Debra Duffy, Clinton County Prison (CCP)
Warden Duran, and CCP Deputy Warden Motter should be affirmed—although, as explained
below, I come to this conclusion for reasons somewhat different from those stated by the court.
See infra note 2. I also agree that the District Court’s denial of plaintiff-appellant Jervis
Goodrich’s motion to appoint counsel did not constitute an abuse of discretion. See infra note 1.
However, I respectfully dissent from the court’s conclusion that the District Court’s grant of
summary judgment in favor of defendant-appellee Laura Lee Dingler should be affirmed. I am of
the view that Goodrich, through his pro se efforts, has proffered enough evidence to create a
genuine issue of fact as to whether Dingler acted with deliberate indifference to his serious
medical needs.
The court’s determination that the record reveals no evidence of deliberate indifference
by Dingler rests on the court’s conclusion that “Dingler’s consulation with Goodrich’s physician
and her clinical assessment of Goodrich clearly indicate an exercise of medical judgment, rather
than deliberate indifference to his medical needs.” ante at --- --- ----.
I part ways with my colleagues because I do not perceive Goodrich’s suit to be predicated
on a theory that Dingler carried out a “clinical assessment” and
“an exercise of medical judgment” that she knew to be markedly inadequate to meet Goodrich’s
serious needs. Rather, appellant’s theory of liability is that, during Goodrich’s several months as
an inmate at CCP, Dingler—who was not a medical professional—effectively and deliberately
19
denied him access to medical care.
In Inmates of Allegheny County Jail v. Pierce, 612 F.2d 754, 763 (3d Cir. 1979),
this court observed that, when assessing a prisoner’s deliberate indifference claims,
“considerable latitude [should be given] to prison medical authorities” lest courts come
to “second-guess the propriety or adequacy of a particular course of treatment . . .
(which) remains a question of sound professional judgment.” The court went on to
explain that “[i]mplicit in this deference to prison medical authorities is the assumption
that . . . an informed judgment has, in fact, been made.” Id. But when an informed
judgment has not been made—where, for example, the prison official in question does
not have medical training—concerns about second-guessing professional determinations
are simply not at issue. Nothing in the record suggests that Dingler had any medical
training whatsoever—certainly no training of a sort qualifying her to diagnose and treat
mental illness. Nor does Dingler so contend. Accordingly, Goodrich’s claim should not
be evaluated under the deferential standard that this court reserves for review of
determinations by prison medical authorities. Rather, we should consider his claim in
light of this court’s observation that, when “prison authorities prevent an inmate from
receiving recommended treatment for serious medical needs or deny access to a physician
capable of evaluating the need for such treatment, the constitutional standard of Estelle
[v. Gamble, 429 U.S. 97 (1976)] has been violated.” Id.
Goodrich has offered undisputed evidence that Dingler knew Goodrich had a
20
diagnosed mental illness. App. 93. In addition, the record establishes that (1) federal
Magistrate Judge William H. Askey, by order dated February 25, 2003, recommended
that Goodrich “be evaluated by a mental health professional and provided with any
treatment recommended by that professional;” and, (2) Dingler, in March of 2003,
declined to comply with that recommendation based on her own non-expert assessment
that “no referral to [a] psychiatrist was warranted.” See App. 179 (Dingler affidavit); see
also id. at 103-04 (order of Magistrate Judge Askey); id. at 180 (notes from Dingler’s
March 17, 2003 meeting with Goodrich, mentioning “referral by federal judge”).
Thus, it seems to me that Goodrich, by his own unaided efforts, has brought
forward evidence on the basis of which a fact-finder could rationally conclude that, while
Goodrich was an inmate at CCP, Dingler “den[ied him] access to a physician capable of
evaluating the need for . . . treatment” of his “serious medical needs.” Pierce, 612 F.2d at
763.7 Accordingly, I would vacate the District Court’s grant of summary judgment in
7
I have noted that Goodrich proceeded pro se in developing the evidence which, in my
judgment, is sufficient to defeat summary judgment in favor of Dingler. Had Goodrich been
represented by counsel in the District Court, it may well be that counsel would have developed
additional evidence. Nonetheless, I do not question the District Court’s denial of Goodrich’s
motion for the appointment of counsel at the time the District Court ruled. That ruling, as my
colleagues explain, was grounded in factors that properly informed the District Court’s exercise
of its discretionary authority. However, I take it for granted that, if my colleagues were to agree
with my view that summary judgment should not have been granted in favor of Dingler, on
remand for further proceedings the District Court would undertake to appoint counsel for
Goodrich. See App. 18 (District Court order stating that Goodrich’s motion for appointment of
counsel “will be denied” but that “[i]n the event . . . that future proceedings demonstrate the need
for counsel, the matter may be reconsidered either by the court, on its own initiative, or upon a
motion properly filed by [Goodrich]”).
21
favor of Dingler and remand this matter for further proceedings.8
8
My agreement with the District Court’s grant of summary judgment in favor of the other
appellees is predicated on the fact that Goodrich has offered no evidence tending to establish that
Dingler’s conduct was in any significant sense affected by an act or omission of any other
appellee.
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FILED
NOT FOR PUBLICATION MAR 15 2017
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BYRON LEROY SCOTT, No. 13-55950
Petitioner-Appellant, D.C. No. 5:13-cv-00703-R
v.
MEMORANDUM*
STATE OF CALIFORNIA,
Respondent-Appellee.
Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Submitted February 14, 2017**
Before: GOODWIN, FARRIS, and FERNANDEZ, Circuit Judges.
Byron Leroy Scott appeals from the district court’s judgment dismissing his
28 U.S.C. § 2254 habeas petition as an unauthorized second or successive petition.
Scott contends that the district court erred because his Eighth Amendment
challenge to his sentence did not become ripe until the Supreme Court announced
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
its decision in Miller v. Alabama, 132 S. Ct. 2455 (2012). He requests, in the
alternative, that this court treat his opening brief as an application to file a second
or successive habeas petition under 28 U.S.C. § 2244(b). We grant this request.
Scott’s opening brief, treated as an application for authorization, makes a
prima facie showing under section 2244(b)(2)(A), and is granted. See Montgomery
v. Louisiana, 136 S. Ct. 718 (2016); Woratzeck v. Stewart, 118 F.3d 648, 650 (9th
Cir. 1997).
The Clerk shall transfer Scott’s opening brief (Docket Entry No. 16), to the
United States District Court for the Central District of California, to be processed
as a section 2254 habeas petition. The petition shall be deemed filed in the district
court on September 29, 2014, the date the opening brief was filed in this court. See
Orona v. United States, 826 F.3d 1196 (9th Cir. 2016).
Because we grant the alternative request for authorization, the appeal has
been rendered moot and we do not address the certified issue raised on appeal. We
leave it to the district court to address the merits of Scott’s claim and the effect, if
any, of Scott’s proceedings under California Penal Code section 1170(d)(2) on his
claim.
All pending motions are denied as moot.
GRANTED.
2 13-55950
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248 F.2d 656
KENNY CONSTRUCTION COMPANY, Inc., Appellant,v.Herschel H. ALLEN et al., t/a J. E. Greiner Company, Appellees.
No. 13791.
United States Court of Appeals District of Columbia Circuit.
Argued October 4, 1957.
Decided October 17, 1957.
Mr. Justin L. Edgerton, Washington, D. C., with whom Messrs. John Wattawa, Charles E. Pledger, Jr., Randolph C. Richardson and John F. Mahoney, Jr., Washington, D. C., were on the brief, for appellant.
Mr. Alexander M. Heron, Washington, D. C., with whom Mr. H. Mason Welch, Washington, D. C., was on the brief, for appellees. Messrs. J. Harry Welch and J. Joseph Barse, Washington, D. C., also entered appearances for appellees.
Before PRETTYMAN, WILBUR K. MILLER, and FAHY, Circuit Judges.
PER CURIAM.
1
The District of Columbia, a municipal corporation, undertook the construction of certain public works. It engaged as consulting engineers Allen, Jenkins, Allen, et al., a partnership of six members trading as J. E. Greiner Company and resident in Baltimore. Kenny Construction Company, Inc., was awarded the contract of construction. Next door to the contemplated site was Greenway, Inc., a rental housing development. As the excavation proceeded, the surrounding earth settled, and Greenway claimed it was damaged. It sued Kenny and the District of Columbia. Kenny sought to implead Allen, Jenkins, Allen, et al., the designers of the plans for the work. Its problem was to get effective service on the Baltimore partnership or the partners. Among other efforts to that end it served process on the Clerk of the Municipal Court for the District of Columbia as agent of the partners. The contract between Allen, Jenkins, Allen, et al., and the District of Columbia contained a clause which read:
2
"Article 8. Appointment of Attorney:
3
"a. Each of the partners constituting Consultant does hereby irrevocably designate and appoint the Clerk of the Municipal Court for the District of Columbia and his successors in office as the true and lawful attorney for each and all of the said partners for the purpose of receiving service of all notices and processes issued by any court in the District of Columbia, as well as service of all pleadings and other papers, in relating [sic] to any action or legal proceedings arising out of or pertaining to this contract or the work required or performed hereunder."
4
This language made the Clerk of the Municipal Court the agent of each of the partners in Allen, Jenkins, Allen, et al., for service of process in "any" lawsuit "pertaining to" the work under this contract. The case at bar certainly pertained to the work under the contract. So, according to the language of the quoted clause, the service was good.
5
Allen, Jenkins, Allen, et al., say, however, the quoted clause was included in the contract at the instance of the District of Columbia and for the purpose of protecting the District and nobody else. But, in the first place, no limitation or negative expression appears in the contract. In the second place, nothing appears to indicate what Allen, Jenkins, Allen, et al., had in mind in providing for designation of an agent, and they, not the District, were the appointers of the agent. What the District may have had in mind is immaterial. In the third place, it would have been simple and easy for Allen, Jenkins, Allen, et al., to have said in the contract that the agent was appointed only for purposes of actions brought by the District. The two immediately preceding clauses in the contract, relating to insurance and indemnification, contained such limiting language. Counsel for the partners urge us to read Article 8 as merely implementing the preceding Articles 6 and 7 and as limited to their scope. We find no basis for doing so; on the contrary the omission of limiting language from Article 8, after its inclusion in Articles 6 and 7, seems to us noteworthy as indicating a variation in purpose. In the fourth place, we do not reach intention as a means of interpretation unless the words are unclear or both parties assert a positive intent contrary to the words and nobody else is adversely affected by the strange meaning. Neither of these conditions obtains here. In the fifth place, it is not a necessary inference that in proposing the appointment of agents by all contractors the District was motivated solely by its own corporate municipal interests. It is just as reasonable to infer that District officials had in mind the desirability of protection for all persons in the District liable to injury from the contract.
6
We think the service on the Clerk of the Municipal Court for the District of Columbia was good. The order of the District Court quashing that service is vacated, and the case is remanded.
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702 S.E.2d 731 (2010)
HERRERA,
v.
The STATE.
No. A10A1381.
Court of Appeals of Georgia.
October 13, 2010.
*732 Lawrence W. Daniel, for Appellant.
Patrick H. Head, Dist. Atty., Amelia G. Pray, Asst. Dist. Atty., Marietta, for Appellee.
MILLER, Chief Judge.
A Cobb County jury found Miguel Liborio Herrera guilty of armed robbery (OCGA § 16-8-41(a)) and aggravated assault with intent to rob (OCGA § 16-5-21(a)(1)), and the trial court sentenced him on each count. On appeal, Herrera claims that (i) the evidence was insufficient to support his convictions, (ii) his trial counsel was ineffective, and (iii) the trial court erred in failing to merge the aggravated assault conviction into the armed robbery conviction. We find that the evidence was sufficient to support Herrera's convictions and that he did not receive ineffective assistance of counsel. The offense of aggravated assault with intent to rob, however, was included in the offense of armed robbery as a matter of fact. Accordingly, we affirm in part and vacate in part and remand the case for resentencing.
1. Herrera contends that the evidence was insufficient to convict him of armed robbery and aggravated assault. We disagree.
"On appeal from a criminal conviction, the evidence is viewed in the light most favorable to the verdict. We neither assess the credibility of the witnesses nor weigh the evidence, but instead determine only whether a rational trier of fact could have found each of the elements of the crime proven beyond a reasonable doubt." (Footnote omitted.) Caraway v. State, 286 Ga.App. 592(1), 649 S.E.2d 758 (2007).
So viewed, the evidence shows the following. The victim was walking across his apartment complex at night when a man later identified as Herrera called out from behind and told him to stop. When he tried to turn, Herrera shot the victim in the leg, immobilizing him. Herrera's co-defendant, Armondo Herieia,[1] came out of the bushes holding a knife, told the victim not to move, and put his hand inside the victim's pockets. The assailants took between $250 and $300, a cell phone, and a wallet.
The evidence was sufficient for any rational trier of fact to find Herrera guilty of armed robbery and of aggravated assault with intent to rob, as alleged in the indictment. See Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979). "[T]he fact that [Herrera] himself testified at trial to a different version of events does not change the result; the jury here was entitled to disbelieve [Herrera's] version of the facts." (Citation and punctuation omitted.) Feldman v. State, 282 Ga.App. 390, 391, 638 S.E.2d 822 (2006).
2. Herrera contends that his trial counsel was ineffective in failing to call Alejandro Marcial as a witness for the defense. We are not persuaded.
"In order to establish ineffectiveness of trial counsel, appellant must show both that counsel's performance was deficient and that the deficient performance prejudiced the defense." (Citations and punctuation omitted.) Williams v. State, 277 Ga. 853, 857(6), 596 S.E.2d 597 (2004).
*733 Herrera testified at trial that his gun discharged during a struggle in a "house of prostitution," and that he was not aware the victim had been hit. Herrera maintained at the hearing on motion for new trial that although Marcial was not present at the shooting Marcial would have supported his trial testimony that the incident in question took place in a brothel.
"The defendant must overcome the strong presumption that counsel's conduct falls within the broad range of reasonable professional conduct. The determination as to which defense witnesses will be called is a matter of trial strategy and tactics." (Citation and punctuation omitted.) Keanum v. State, 212 Ga.App. 662, 664(3), 442 S.E.2d 790 (1994). As shown at the hearing on motion for new trial, Herrera's trial counsel spoke with Marcial during the trial, determined that Marcial had a criminal record, and made a considered decision not to call him as a witness. According to trial counsel, "[t]here was some information there that might have been detrimental, and if [Marcial] had been put on the witness stand, we figured it might not be beneficial for [Herrera]." This testimony authorized the trial court's finding that trial counsel was not ineffective in declining to utilize Marcial as a defense witness. See Beattie v. State, 240 Ga.App. 327, 329(2)(b), 523 S.E.2d 389 (1999).
3. Lastly, Herrera claims that the trial court erred in not merging his conviction for aggravated assault with intent to rob into his conviction for armed robbery. We agree.
Whether two offenses should be merged is a question of law, and we apply a "plain legal error" standard of review. Lavigne v. State, 299 Ga.App. 712, 714(2), 683 S.E.2d 656 (2009).
A defendant may not be convicted of more than one crime if one crime is included in the other. See OCGA § 16-1-7(a). In making this determination we apply the "required evidence" test:
[T]he applicable rule is that where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not.
(Punctuation and footnote omitted.) Drinkard v. Walker, 281 Ga. 211, 215, 636 S.E.2d 530 (2006). Here, Herrera was indicted for aggravated assault in that he unlawfully assaulted the victim "with intent to rob by shooting [the victim] in the leg with a handgun." See OCGA § 16-5-21(a)(1). He was charged with armed robbery by taking property from the victim "by [the] use of an offensive weapon, to wit: a handgun." See OCGA § 16-8-41(a). Armed robbery requires proof that property is taken from the victim, a fact not required to establish aggravated assault with intent to rob. But as our Supreme Court has recently held, "there is no element of aggravated assault with intent to rob that is not contained in armed robbery." Lucky v. State, 286 Ga. 478, 482, 689 S.E.2d 825 (2010).
[A]ggravated assault with intent to rob does not contain a provision that is not a fact which must be proved in armed robbery. Both crimes require proof of an intent to rob, and the "assault" requirement of aggravated assault is the equivalent of the armed robbery requirement that the taking be "by use of an offensive weapon" since "use of an offensive weapon" takes place when the weapon is used as an instrument of actual or constructive force that is, actual violence exerted on the victim or force exerted upon the victim by operating on the victim's fears of injury to the person, property, or character of the victim.
(Citation and punctuation omitted.) Id.
The State argues that the crimes were separate because the aggravated assault was completed before the armed robbery. See Gaither v. Cannida, 258 Ga. 557, 557-558(1), 372 S.E.2d 429 (1988) (where one crime is completed prior to second crime there is no merger). As charged in the indictment, however, the State was required to show that the robbery was accomplished by the use of a handgun and that the aggravated assault, also alleged to be accomplished with a handgun, was made with the intent to rob. Compare Garibay v. State, 290 Ga.App. 385, 387(2), 659 S.E.2d 775 (2008) (defendant indicted *734 for armed robbery and aggravated assault with a deadly weapon). The robbery that was intended by Herrera when he shot the victim in the leg was completed at the same place and approximately the same time as the shooting. Compare Henderson v. State, 285 Ga. 240, 244(4), 675 S.E.2d 28 (2009) (aggravated assault by pointing gun at victim outside duplex did not merge with subsequent armed robbery inside the duplex). Applying Lucky, supra, the assault forming the basis of the aggravated assault with intent to rob was "contained within the `use of an offensive weapon' element of armed robbery," 286 Ga. at 482, 689 S.E.2d 825, and so the aggravated assault "was established by proof of the same or less than all the facts required to establish the commission of the [armed robbery]." (Footnote omitted.) Drinkard, supra, 281 Ga. at 216, 636 S.E.2d 530 It follows that the offenses merge. Lucky, supra, 286 Ga. at 482, 689 S.E.2d 825. Accordingly, we vacate the conviction and sentence for aggravated assault and remand the case for resentencing with direction to merge the aggravated assault count into the armed robbery count.
Judgment affirmed in part and vacated in part, and case remanded for resentencing.
PHIPPS, P.J., and JOHNSON, J., concur.
NOTES
[1] We affirmed Herieia's convictions for armed robbery and aggravated assault in Herieia v. State, 297 Ga.App. 872, 678 S.E.2d 548 (2009).
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In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-8019
GEORGE and RUTH SCHILLINGER,
Respondents,
v.
UNION PACIFIC RAILROAD COMPANY
and UNION PACIFIC CORPORATION,
Petitioners.
____________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 05-cv-0437—Michael J. Reagan, Judge.
____________
SUBMITTED AUGUST 11, 2005—DECIDED OCTOBER 5, 2005Œ
____________
Before POSNER, KANNE, and WOOD, Circuit Judges.
WOOD, Circuit Judge. Union Pacific Railroad Company
and Union Pacific Corporation removed this suit to fed-
eral court, invoking the Class Action Fairness Act of
2005, Pub. L. No. 109-2, 119 Stat. 4 (2005) (CAFA). The
district court remanded after determining that the case
formally began before CAFA’s effective date of February 18,
2005, and thus was not subject to the Act. The companies
acknowledge that the suit predates CAFA, but they argue
that two developments that post-date CAFA have changed
Œ
This Opinion was originally released in typescript form.
2 No. 05-8019
the case so profoundly that they may now remove it: the
addition of a new defendant, and the expansion of the class
definition. Because we agree with the district court’s
conclusions that the apparent naming of a new defendant
in plaintiff’s amended complaint was a scrivener’s error and
that the expansion of the class was not significant enough
to create a new claim or new action, we deny the petition for
permission to appeal.
I
This case began on June 7, 2002, when George and Ruth
Schillinger sued Union Pacific Corporation (UPC) and
Union Pacific Railroad Company (UPRR) in state court. The
Schillingers contended that the companies, which allegedly
had a right-of-way on plaintiffs’ land, committed trespass
and were unjustly enriched when they leased space on the
land to telecommunications providers. The complaint
proposed a class of Illinois landowners who also allegedly
had been harmed by the companies’ use of rights-of-way
belonging to the class members.
Both companies, represented by the same lawyer, re-
moved the case to the District Court for the Southern
District of Illinois, invoking the general removal author-
ity of 28 U.S.C. § 1441. Although the parties were diverse
(the Schillingers are citizens of Illinois, UPC is incorporated
in Utah and has its principal place of business in Nebraska,
and UPRR is incorporated in Delaware and has its principal
place of business in Nebraska), the district court concluded
that the amount in controversy did not exceed $75,000. See
28 U.S.C. § 1332. It also rejected the defendants’ argument
that federal question jurisdiction existed because the
putative class members’ rights could be determined only by
reference to the federal rights-of-way. The district court
accordingly remanded the case to state court based on the
lack of federal jurisdiction. See 28 U.S.C. § 1447(c). Back in
No. 05-8019 3
state court, plaintiffs realized that UPC did not operate a
railroad or own any rights-of-way and voluntarily dismissed
UPC from the case.
In May 2003 the Schillingers moved to amend their
complaint, attaching a copy of the proposed amended
complaint to the motion. The amended complaint expanded
the proposed class of plaintiffs to include property owners
nationwide who owned land over which UPRR had a right-
of-way. Although UPC had already been dismissed, the
motion to amend and the proposed amended complaint
listed both UPRR and UPC as defendants. Plaintiffs and
UPRR briefed the motion, arguing only the merits of
expanding the class definition. Neither party addressed the
fact that UPC shows up in the amended complaint’s caption
and was mentioned in the allegations. In fact, it appears
that UPC was never served with a copy of the amended
complaint, though it probably had actual notice of the
complaint through its common lawyer with UPRR.
Before the state court ruled on the motion to amend the
complaint, it stayed proceedings pending resolution of
another case. When the litigation resumed in 2005, the
parties continued to debate the merits of the motion to
amend, filing supplemental briefs and orally arguing.
Again, neither party commented on the inclusion of UPC in
the proposed amended complaint.
In May 2005 the state court granted the motion to amend
and the clerk of court filed the amended complaint that was
attached to the 2003 motion. The clerk stamped the
amended complaint with a May 2005 filing date. Plaintiffs
mailed a copy of the filed amended complaint to counsel for
UPRR. UPRR and UPC together then removed the case
again to the federal district court.
4 No. 05-8019
II
We address first the companies’ contention that the
addition of a new defendant—in this case the apparent
reinstatement of UPC as a defendant—must be treated as
the commencement of a new action for purposes of CAFA.
The companies correctly observe that in general, “a defen-
dant added after February 18 [2005] could remove because
suit against it would have been commenced after the
effective date[.]” Schorsch v. Hewlett-Packard Co., 417 F.3d
748, 749 (7th Cir. 2005). See also Knudsen v. Liberty
Mutual Ins. Co., 411 F.3d 805, 807 (7th Cir. 2005).
The problem for the companies here is that the district
court found, in effect, that UPC was never really brought
back into the case, when it concluded that the inclusion
of UPC as a defendant in the amended complaint was a
scrivener’s error. We review the district court’s finding with
deference, see Sparrow v. Heller, 116 F.3d 204, 206 (7th Cir.
1997), and there is ample support in the record for the
district court’s determination. The Schillingers did not
discuss the addition of UPC in their motion to amend or
supporting memorandum, nor did they serve UPC with a
copy of either the motion to amend or the filed amended
complaint. Most importantly, plaintiffs’ counsel filed an
affidavit in which he explained that his staff used the
original complaint as a word processing template in draft-
ing the amended complaint and failed to notice that this
resulted in the incorporation of the old caption and intro-
ductory allegations into the amended complaint. The
district court acted within its discretion in finding that
UPC’s inclusion in the amended complaint was a clerical
error, that plaintiffs had no intention of bringing UPC back
into the litigation, and that UPC was in fact not a new
party to the suit.
This case should not come to federal court if the only
ground for jurisdiction is a clerical error, however careless.
No. 05-8019 5
Consider if the district court had allowed plaintiffs to
amend their complaint to correct the error by removing
UPC from the allegations, as it surely could have done. See
FED. R. CIV. P. 15(a), 60(a). In all likelihood, the court would
have been required to remand at that point. When a
plaintiff amends his complaint after removal in a way that
destroys diversity, a district court must consider the
reasons behind the amendment in determining whether
remand is proper. If the plaintiff amended simply to destroy
diversity, the district court should not remand. See
CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H.
COOPER, FEDERAL PRACTICE AND PROCEDURE § 3723, at
591 (1998 and Supp.) (citing district court cases). But an
amendment that is made for legitimate purposes may be a
proper ground for a remand to state court. See id. at
592 (“[T]he court will take account of whether the plain-
tiff has been dilatory or is trying to destroy diversity,
whether the plaintiff will be significantly disadvantaged
if the amendment is not allowed, and whether remanding
the action to state court will prejudice the defendant.”); see
also Costain Coal Holdings, Inc. v. Resource Inv. Corp., 15
F.3d 733, 734-35 (7th Cir. 1994) (directing district court
to remand case to state court after indispensable party
intervened destroying diversity). The correction of a clerical
mistake falls into the latter category, and the district court
would properly have granted a motion to remand if plain-
tiffs had amended their complaint to correct the mistake. It
is a short step from that to the conclusion that the district
court correctly held that jurisdiction is defeated if one of the
pleading elements necessary to establish jurisdiction is a
scrivener’s error. Cf. Selim v. Pan American Airways Corp.,
254 F. Supp.2d 1316, 1319 (S.D. Fla. 2003) (refusing to
exercise diversity jurisdiction over a matter “where such
jurisdiction clearly does not exist, merely due to an error by
Plaintiff.”).
Even if the inadvertent inclusion of UPC does not support
6 No. 05-8019
CAFA removal here, the companies argue that the expan-
sion of the proposed class does so. After the amendments to
the complaint, however, this suit is still between the
Schillingers and others similarly situated (whomever that
may turn out to include) and UPRR, and it concerns the
same claim alleged in the original complaint. As Schorsch
explains, the expansion of a proposed class does not change
the parties to the litigation nor does it add new claims. 417
F.3d at 750.
Recognizing that plaintiffs’ amendment did not add
any parties or add a new claim, the companies contend
instead that the expansion was a “step sufficiently distinct
that courts would treat it as independent for limitations
purposes” and accordingly it commenced a new piece
of litigation under CAFA. See Knudsen, 411 F.3d at 807.
This is the same argument that Hewlett-Packard ad-
vanced and this court rejected in Schorsch. In that case,
plaintiff expanded the proposed class from consumers of one
computer-printer product that contained an allegedly faulty
chip to consumers of two other computer-printer products
that contained the same allegedly faulty chip. The original
complaint furnished Hewlett-Packard with the information
necessary to defend against the amended complaint, this
court held, and as a result the amendment would relate
back to the original complaint for Illinois statute-of-limita-
tion purposes. This also implies that the amendment did
not commence a new action under CAFA. Schorsch, 417
F.3d at 750-51.
We acknowledge that the Schillingers’ expansion of the
class (if successful) may have greater repercussions for
UPRR than Hewlett-Packard potentially faced in its
litigation. If plaintiffs’ nationwide class is eventually
certified, UPRR will have more rights-of-way to research
and more state laws under which to analyze various
claims than if it was facing only a class of Illinois plaintiffs.
But, as we explained in Schorsch and Knudsen, the poten-
No. 05-8019 7
tial for a larger amount of legal research and discovery in
and of itself is not a significant enough step to create new
litigation.
There is another potential reason why the changes here
may not have been enough to qualify as the “commence-
ment” of a new action for CAFA. Illinois law governs the
statute of limitations in the trespass action. In determining
whether an amended complaint meets the statute-of-
limitations deadline, Illinois courts look to the date plain-
tiffs filed their motion to amend the complaint rather than
the date the trial court grants the motion and files in the
pleading. See, e.g., Enzenbacher v. Browning-Ferris Ind. of
Ill., Inc., 774 N.E.2d 858, 864 (Ill. App. Ct. 2002); Onsite
Engineering & Management, Inc. v. Illinois Tool Works,
Inc., 744 N.E.2d 928, 933 (Ill. App. Ct. 2001). The logic
underlying this practice is that defendants are on notice
of the amendment when the motion is filed and it would
be unfair to plaintiffs if a trial court waited months or years
to rule. See generally Moore v. State of Ind., 999 F.2d 1125,
1131 (7th Cir. 1993) (“As a party has no control over when
a court renders its decision regarding the proposed
amended complaint, the submission of a motion for leave to
amend, properly accompanied by the proposed amended
complaint that provides notice of the substance of those
amendments, tolls the statute of limitations, even though
technically the amended complaint will not be filed until
the court rules on the motion.”).
It is not clear whether this state practice would govern
federal procedure in the circumstances presented here. On
the one hand, in cases for which state law provides the rule
of decision, federal courts apply state statutes of limita-
tions, including qualifications on those statutes. See, e.g.,
Walker v. Armco Steel Corp., 446 U.S. 740, 751 (1980). On
the other hand, federal courts have their own rules govern-
ing when an action is “commenced” for federal procedural
purposes. See FED. R. CIV. P. 3. If Illinois regarded the new
8 No. 05-8019
claims as “commenced” against UPRR back in 2003, then
UPRR had notice of their existence at that time for pur-
poses of the ongoing state court action. The district court’s
earlier decision that there was no jurisdiction had nothing
to do with the existence (or nonexistence) of UPC as a party,
and thus the amendment would not have prompted a new
removal effort under the normal rules of 28 U.S.C. § 1446.
There is a reasonable argument for saying that the opera-
tive events here all occurred before CAFA’s effective date,
regardless of the fact that the formal acceptance of the
amended pleading took place after CAFA was available. If
so, then this is an independent reason why UPRR’s current
effort to remove cannot succeed.
We recognize, however, that this is a complex question.
CAFA may make state rules about statutes of limita-
tions irrelevant to the type of commencement that is
necessary for federal removal. CAFA permits a class ac-
tion to be removed “in accordance with [28 U.S.C.] section
1446 . . . .” It defines a “class action” as “any civil action
filed under rule 23 of the Federal Rules of Civil Proce-
dure or similar State statute or rule of judicial proce-
dure . . . .” 28 U.S.C. § 1332(d)(1)(B). The date of filing, in
the context of an amended pleading, may refer to the date
when the court accepts a proposed amendment, not the date
when the amendment is proffered. If, therefore, contrary to
our finding above, the amendment here was enough to
make this a new case for CAFA purposes, then UPRR may
have been entitled to rely on the date when the amendment
was finally accepted by the state court. We prefer to save
this complex issue for another day, when the choice of law
and interpretation of federal law will govern the outcome.
No. 05-8019 9
III
The district court correctly held that this case was
commenced before CAFA’s enactment. Neither the scriv-
ener’s error that purported to add UPC as a “new” party nor
the expanded class definition changed the case sufficiently
to change that fact. Accordingly, the petition for permission
to appeal is DENIED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-17-05
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3Jn tbe Wniteb ~tates (!Court of jfeberal (!Claims
No. 16-17C
(Filed February 12, 2016)
NOT FOR PUBLICATION
************************
*
*
STANLEY HOWARD, *
* FILED
Plaintiff, *
v. * FEB t 2 2016
* U.S. COURT OF
THE UNITED STATES, * FEDERAL CLAIMS
*
Defendant. *
*
************************
ORDER
On February 8, 2016, the Clerk's office received from Mr. Howard a document
that was not filed at that time because it lacked proof of service, a proper case
caption, and the necessary copies. The document was not, on its face, of a type
appropriate for filing. Upon close review, however, the document appears to be a
request from Mr. Howard that the Court reconsider the January 29, 2016 dismissal,
on the ground that the United States includes the state of Delaware. Despite the
aforementioned defects, the Clerk's office is directed to file the document as a
motion for reconsideration under Rule 59 of the Rules of the United States Court of
Federal Claims.
Mister Howard's motion reflects his continued failure to understand our
court's jurisdiction. This Court only has jurisdiction over certain cases brought
against the United States government and not cases challenging the actions of state
or local governments or officials. Vlahakis v. United States, 215 Ct. Cl. 1018, 1018
(1978). Since the Court does not have jurisdiction over his claim, the Court has no
power or authority to conduct the mediation that Mr. Howard requests. Plaintiffs
motion for reconsideration is therefore DENIED.
IT IS SO ORDERED.
Judge
-2-
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122 F.3d 1078
Barberv.Conradi*
NO. 96-6451
United States Court of Appeals,Eleventh Circuit.
Aug 06, 1997
Appeal From: N.D.Ala. ,No.9501229CVBS
1
Affirmed in part, Reversed in part.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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53 F.3d 1285
Maddenv.Singletary*
NO. 94-2571
United States Court of Appeals,Eleventh Circuit.
Apr 27, 1995
1
Appeal From: M.D.Fla., No. 89-00087-CIV-OC-10
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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F I L E D
United States Court of Appeals
Tenth Circuit
. UNITED STATES CO URT O F APPEALS
May 3, 2007
TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
D A V ID E. R OB ISO N ,
Petitioner-A ppellant, No. 06-7121
v. Eastern District of Oklahoma
R ON W A R D , (D.C. No. CIV-03-578-RAW )
Respondent-Appellee.
OR DER DENY ING CERTIFICATE O F APPEALABILITY *
Before BR ISC OE, M cKA Y, and M cCO NNELL, Circuit Judges.
David E. Robison, a state prisoner proceeding pro se, seeks a certificate of
appealability (COA) that would allow him to appeal from the district court’s order
denying his habeas corpus petition under 28 U.S.C. § 2254. See 28 U.S.C. §
2253(c)(1)(A). Because w e conclude that M r. Robison has failed to make “a
substantial show ing of the denial of a constitutional right,” we deny his request
for a COA, and dismiss the appeal. 28 U.S.C. § 2253(c)(2).
I. Background
Law enforcement suspected M r. Robison of manufacturing
methamphetamine after Ron Ryals, a loss-prevention employee at the W al-M art in
*
This order is not binding precedent, except under the doctrines of law of
the case, res judicata, and collateral estoppel.
Okmulgee, Oklahoma, noticed him placing eight bottles of peroxide, several
gallons of acetone, and two cases of HEET gas treatment into his shopping cart on
April 21, 2000. M r. Ryals immediately notified Officer M ike Randol, a member
of the district attorney’s drug task force, of M r. Robison’s suspicious behavior.
Officer Randol arrived at the store several minutes after the phone call and
observed M r. Ryals purchasing various items commonly used in the production of
methamphetamine. After M r. Ryals left the store, Officer Randol followed his
brow n pickup truck to a G it-n-G o convenience store and watched with binoculars
as Robison exited the establishment with another three bottles of HEET gas
treatment. Officer Randol then followed M r. Robison to the residence of co-
defendant John M cClusky and observed him carry the items into the house.
After several weeks of surveillance, Officer Randol obtained a search
warrant for the M cClusky home. The search on April 27, 2000, turned up various
accouterments of methamphetamine production, as well as several syringes
containing methamphetamine. Officers arrested M r. M cClusky and Tara W agner,
both residents of the house, for manufacturing methamphetamine. M r. Robison,
who arrived at the home at the time of the arrest, was later added as a co-
defendant.
Prior to trial M r. Ryals realized that he knew M r. Robison but had not
recognized him at W al-M art due to his squalid appearance. At trial both M r.
Ryals and Officer Randol testified regarding M r. Robison’s W al-M art and Git-n-
-2-
Go shopping activities. In addition to the testimony of Ryals and Randol, co-
defendants M cClaskey and W agner testified that M r. Robison often obtained the
precursor chemicals for methamphetamine production on their behalf. In return
for his services, M r. Robison received some of the product, which he used or
distributed. As a defense, M r. Robison claimed that Officer Randol either was
mistaken or lied about identifying M r. Robison as the W al-M art shopper. He also
claimed that while he sometimes purchased food items for M r. M cClaskey at W al-
M art, he had never purchased anything used to manufacture methamphetamine.
A jury convicted M r. Robison of endeavoring to manufacture methamphetamine
in violation of O kla. Stat. tit. 63, § 2-408 (1971).
M r. Robison sets forth the following grounds for relief:
1. The indentification [sic] of M r. Robison by Ronnie R yals should
have been suppressed because it was so tainted by suggestiveness and
conduciveness to misidentification that [petitioner’s] due process
rights were violated. . . .
2. The trial court committed plain and highly prejudicial error in failing
sua sponte to instruct the jury on the extremely careful scrutiny
required in considering the issue of eyewitness identifaction [sic]
where misidentification was an essential part of M r. Robinson’s [sic]
defense. . . .
3. The jury instructions w ere fatally defective because they failed to
inform the jury of all of the elements of the crime. . . .
4. The prosecutor injected unfairness into the trial by presenting
improper rebuttal testimony, arguing facts not in evidence, and
asking the jury to penalize M r. Robison for exercising his
constitutional right to a jury trial. . . .
-3-
5. The jury should have been instructed that seven years imprisionment
[sic], rather than twenty years imprisonment, was the minimum for
the crime. . . .
6. Considering the entire record, M r. Robison’s lack of a prior record,
and the sentence given to his more culpable co-defendant, the
sentence imposed was excessive. . . .
7. Failure to move for suppression of the identification of M r. Robison
by Ronnie Ryals, to request an instruction on eye witness testimony,
and to object to an incomplete instruction of the elements of the
offense charged constituted ineffective assistance of counsel. . . .
8. The trial errors cumulatively deprived M r. Robison of a fair trial and
reliable verdict.
Appellant’s Br. 5-21.
II. Discussion
A habeas petitioner may appeal the denial of his 28 U.S.C. § 2254 motion
only if the district court or this Court first issues a COA. 28 U.S.C. §
2253(c)(1)(A). A COA is appropriate “only if the applicant has made a
substantial showing of the denial of a constitutional right.” 28 U.S.C. §
2253(c)(2). In order to make such a showing, a petitioner must demonstrate that
“reasonable jurists could debate whether . . . the petition should have been
resolved in a different manner or that the issues presented were adequate to
deserve encouragement to proceed further.” Slack v. M cDaniel, 529 U.S. 473,
484 (2000) (internal quotation marks omitted). Because reasonable jurists could
not differ regarding each of the eight issues raised by M r. Robison, we DENY his
request for C OA .
-4-
A. Eyew itness Testimony (G round 1)
M r. Robison challenges the admission of M r. Ryals’s eyewitness testimony
because M r. Ryals did not recognize the defendant at the time he observed him at
W al-M art, and only realized he knew the defendant after receiving the subpoena
for trial. At trial, M r. Ryals identified M r. Robison as the shopper he saw
purchasing methamphetamine precursors that day in April.
A trial court’s admission of eyew itness identification violates a defendant’s
right to due process only when the procedure by which the witness identifies the
defendant “is so unnecessarily suggestive that it is ‘conducive to irreparable
mistaken identification.’” Grubbs v. Hannigan, 982 F.2d 1483, 1490 (10th Cir.
1993) (quoting Kirby v. Illinois, 406 U.S. 682, 691 (1972)). For instance, courts
have found eyewitness-identification procedures unnecessarily suggestive when a
witness is asked to pick the suspect out of a lineup or photo array of individuals
with strikingly different characteristics. Id. If the court finds the procedure
unnecessarily suggestive, it then considers whether under the totality of the
circumstances the identification was reliable. Id. at 1489-90. The court considers
several factors to determine the reliability of eyewitness testimony, including the
witness’s ability to view the accused at the time of the crime, “the witness’ degree
of attention, the accuracy of his prior description of the criminal, the level of
certainty demonstrated by the witness at the confrontation, and the length of time
-5-
between the crime and the confrontation.” Id. (quoting Neil v. Biggers, 409 U.S.
188, 199-200 (1972)).
In this case, M r. Ryals realized that M r. Robison was the W al-M art shopper
after he saw M r. Robison’s name on a subpoena that neither contained Robison’s
picture nor identified him as the W al-M art shopper. This procedure was not
unnecessarily suggestive— indeed, it was not suggestive at all within the meaning
of our case law. Consequently, it did not violate M r. Robison’s constitutional
right to due process. Even if it were suggestive, M r. Ryals’s testimony was
reliable given the totality of the circumstances. Ryals observed M r. Robison
shopping for at least several minutes, during which time he closely followed M r.
Robison’s actions. Though Ryals did not identify M r. Robison until more than a
year after his observations, he expressed absolute certainty that M r. Robison was
the man he observed in W al-M art. Because the identification procedure was not
suggestive and M r. Ryals’s eyew itness testimony was reliable, the district court
did not err in admitting the testimony.
B. Jury Instructions (G rounds 2, 3, and 5)
M r. Robison contends that the court should have issued sua sponte a
cautionary jury instruction regarding eyewitness testimony. He also claims that
the court should have instructed the jury that, in order to convict, it must find
both a specific intent to manufacture methamphetamine and an overt act in
-6-
furtherance of that crime. Finally, he argues that the jury should have been
instructed that the minimum sentence for his offense was seven rather than twenty
years because the legislature changed the minimum sentence prior to his trial.
M r. Robison did not object to any of these instructions at trial. The Oklahoma
Court of Criminal Appeals (OCCA) upheld the instructions under plain error
review.
A state court’s interpretation of a state statute “is a matter of state law
binding on this court.” Parker v. Scott, 394 F.3d 1302, 1319 (10th Cir. 2005)
(internal quotations omitted). W e will not employ the writ of habeas corpus to set
aside a state conviction “on the basis of erroneous jury instructions unless the
errors had the effect of rendering the trial so fundamentally unfair as to cause a
denial of a fair trial in the constitutional sense.” Shaffer v. Stratton, 906 F.2d
506, 508 (10th Cir. 1990) (internal quotations omitted). W hen determining
whether a jury instruction has rendered a trial fundamentally unfair, the question
is not “whether the [challenged] instruction is undesirable, erroneous, or even
universally condemned, but whether the instruction so infected the trial that the
resulting conviction violates due process.” Nguyen v. Reynolds, 131 F.3d 1340,
1357 (10th Cir. 1997) (internal quotations omitted). H ere, Nguyen’s already high
bar is even higher, because the defendant failed to object to the instructions at
trial.
-7-
The OCCA determined that the jury instructions outlining the elements of
the offense and the sentencing requirements complied with state law . W e are
bound by the OCCA’s interpretation of the Oklahoma statute. Parker, 394 F.3d at
1319. M r. Robison has not met his burden to show that these instructions
rendered his trial constitutionally unfair.
C. Prosecutorial M isconduct (G round 4)
M r. Robison claims that his trial was unfair because the prosecutor
presented improper rebuttal testimony and argued facts not in evidence. He does
not, however, point to any specific instances of such conduct. He also claims
that the prosecutor made unfairly prejudicial remarks to jurors when he told them
that by asserting his right to a jury trial, M r. Robison was “thumbing his nose” at
them. R. vol. 2, Trial Tr. at 315. This behavior does not rise to the level of
prosecutorial misconduct. “[P]rosecutorial misconduct in a state court violates a
defendant’s right to a fair trial only if the prosecutor’s actions ‘so infected the
trial with unfairness as to make the resulting conviction a denial of due process.’”
Nguyen, 131 F.3d at 1358 (quoting Donnelly v. DeChristoforo, 416 U.S. 637, 643
(1974)). W e will consider “the strength of the evidence against the defendant and
decide whether the prosecutor’s statements plausibly could have tipped the scales
in favor of the prosecution.” Cummings v. Evans, 161 F.3d 610, 618 (10th Cir.
1998). W e review the OCCA’s denial of this claim only for “unreasonable
-8-
application of the standard.” Bland v. Sirmons, 459 F.3d 999, 1024 (10th Cir.
2006). In light of the powerful evidence against M r. Robison, it was reasonable
for the O CCA to rule that the prosecutor’s remarks did not render his trial unfair.
D. Sentencing Errors (G round 6)
M r. Robison contends that his twenty-five year sentence is excessive
because this was his first felony conviction and because M r. M cClaskey, who
w as— according to M r. R obison— more culpable, received a lesser sentence. “[A ]
sentence within the limits imposed by statute is neither excessive nor cruel and
unusual under the Eighth Amendment.” United States v. Delacruz-Soto, 414 F.3d
1158, 1168 (10th Cir. 2005). M r. Robison’s tw enty-five year sentence fell within
the statutory range of twenty years to life. Any disparity between M r. Robison
and M r. M cClaskey’s sentence may be explained by M r. M cClaskey’s cooperation
with law enforcement. And we have explicitly held that disparate sentences do
not violate the Eighth Amendment when one defendant receives a sentence
reduction for cooperation with the government. United States v. Rackstraw, 7
F.3d 1476, 1482-83 (10th Cir. 1993).
E. Ineffective Assistance of Counsel (G round 7)
M r. Robison claims ineffective assistance of counsel on three grounds: trial
counsel did not move to suppress M r. Ryals’s eyewitness testimony, did not
request a cautionary jury instruction regarding the eyewitness testimony, and did
-9-
not object to the jury instruction that explained the elements necessary for
conviction. An ineffective assistance of counsel claim requires M r. Robison to
show that “counsel’s performance was deficient” and that “the deficient
performance prejudiced [his] defense.” Strickland v. Washington, 466 U.S. 668,
687 (1984).
M r. Robison first contends that his counsel should have objected to the
admission of M r. Ryals’s eyewitness testimony. To prevail, he must show both
that trial counsel was deficient in failing to object to the eyewitness identification
and that but for counsel’s failure, the result at trial would have been different.
Snow v. Sirmons, 474 F.3d 693, 720-21 (10th Cir. 2007) (citing Strickland v.
Washington, 466 U.S. 668, 694 (1984)). In Snow, trial counsel did not object to
eyewitness testimony from two witnesses who had both previously failed to pick
the defendant out of a lineup. Id. at 721. Both the OCCA and the federal habeas
court determined that the failure to object to the admission of the testimony
constituted a trial strategy since counsel attempted to discredit the witnesses
through extensive cross-examination. In addition, the court in Snow expressed
doubt as to whether an objection to the testimony would have been successful. Id.
Counsel’s failure in this case to object to the admission of M r. Ryals’s
testimony can be similarly interpreted as a trial strategy. M r. Robison’s counsel
cross-examined M r. Ryals regarding how he knew M r. Robison and how he came
-10-
to identify him as the W al-M art shopper. And while the court in Snow expressed
uncertainty regarding whether the eyewitness testimony at issue there would have
been admitted over counsel’s objection, the record in this case makes clear that
M r. Robison’s chances of excluding Ryals’s testimony were slender. M r. Ryals
recognized M r. Robison without any suggestion from law enforcement and under
the totality of the circumstances test, his eyewitness identification was reliable.
Trial counsel was not deficient in failing to object to the admission of the
eyewitness testimony: that “failure” was a deliberate trial strategy and in any
event, the testimony was properly admitted.
M r. Robison also claims ineffective assistance of counsel because his
attorney failed to request a cautionary jury instruction regarding eyewitness
testimony. M r. Robison cannot claim ineffective assistance on this ground
“unless the failure to request such an instruction represent[s] a ‘substantial
violation of [his] rights.’” Snow, 474 F.3d at 721 (quoting Snow v. State, 876
P.2d 291, 295 (Okla. Crim. App. 1994)). Such a violation occurs only when there
is a “very substantial likelihood of misidentification.” Id. (internal quotations
omitted). Though the court did not issue an instruction on eyewitness testimony
in particular, it did instruct the jury that to determine the credibility of w itness
testimony it may consider “the ability of the witness to remember and relate past
occurrences, the means of observation, and the opportunity of knowing the
matters about which the witness has testified.” R. vol. 2, doc. 13 at 66.
-11-
Considering the witness credibility instruction, defense counsel’s ample
opportunity to discredit eyewitness testimony through cross-examination, and the
fact that the prosecution’s case did not rest solely on eyewitness testimony, no
additional cautionary instruction regarding eyewitness testimony was necessary.
See U nited States v. Thom a, 713 F.2d 604, 608 (10th Cir. 1983) (government’s
standard instructions sufficiently focused jurors’ attention on the issues critical
for conviction). Thus, counsel’s failure to request one did not violate M r.
Robison’s rights.
Finally, M r. Robison claims ineffective assistance of counsel because his
attorney did not object to the jury instruction that outlined the elements of the
offense. The court instructed the jury that it must find that the state proved M r.
Robison, “First, knowingly/intentionally; [s]econd, endeavor[ed] to manufacture;
[t]hird, the controlled dangerous substance of M ethamphetamine.” R. vol. 2, doc.
13 at 43. It defined “endeavor” as “[a] systematic or continuous effort to attain
some goal.” Id. at 44. M r. Robison claims that “endeavor” and “attempt” are
equivalent w ords requiring the jury to find that he committed an overt act.
Further, M r. Robison argues that “knowingly/intentionally manufactured” did not
accurately describe the mental state required for conviction. The OCCA
disagreed, finding that the instructions properly informed the jury of the elem ents
-12-
of endeavoring to manufacture methamphetamine. 1 Because the jury instruction
properly outlined the elements of the crime, counsel was not deficient in failing to
object to the instruction.
F. Cumulative Error (G round 8)
Cumulative error analysis does not apply to the cumulative effect of non-
errors. M oore v. Reynolds, 153 F.3d 1086, 1113 (10th Cir. 1998). Because the
trial court committed no errors, there can be no cumulative error.
III. Conclusion
Accordingly, we D EN Y M r. Robison’s request for a COA and DISM ISS
this appeal.
Entered for the Court,
M ichael W . M cConnell
Circuit Judge
1
Since M r. Robison’s conviction, the OCCA has maintained that “there is
no requirement of an overt act to complete the crime” of endeavoring to
manufacture methamphetamine. Tidmore v. State, 95 P.3d 176, 179 (Okla. Crim.
App. 2004). At issue in Tidmore was a jury instruction identical to the one used
at M r. Robison’s trial. Id. at 178.
-13-
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July 16 2013
OP 12-0429
IN THE SUPREME COURT OF THE STATE OF MONTANA
2013 MT 193
METRO AVIATION, INC., et al.,
Plaintiffs,
v.
UNITED STATES OF AMERICA,
Defendant.
ORIGINAL PROCEEDING: Certified Question, United States District Court
District of Utah, Central Division
Honorable Tena Campbell, Presiding Judge
COUNSEL OF RECORD:
For Plaintiffs:
Mark S. Northcraft (argued), James R. Morrison, Northcraft, Bigby
& Biggs, P.C., Seattle, Washington
Robert H. Bullock, Brian G. Martin, Strong & Hanni, Salt Lake City, Utah
For Defendant:
Stuart F. Delery, Acting Assistant Attorney General, U.S. Department
of Justice, Washington, District of Columbia
David B. Barlow, United States Attorney, Jeannette Swent, Assistant
United States Attorney, District of Utah, Salt Lake City, Utah
Steven A. Kirsch (argued), Jill Dahlmann Rosa, United States Department
of Justice, Washington, District of Columbia
For Amicus Montana Defense Trial Lawyers:
Nicholas J. Pagnotta (argued), Williams Law Firm, Missoula, Montana
Dale R. Cockrell, Moore, Cockrell, Goicoechea & Axelberg, P.C.,
Kalispell, Montana
For Amicus Montana Trial Lawyers Association:
L. Randall Bishop (argued), Bishop & Heenan, Billings, Montana
Lawrence A. Anderson, Attorney at Law, Great Falls, Montana
Argued: May 14, 2013
Submitted: May 15, 2013
Decided: July 16, 2013
Filed:
__________________________________________
Clerk
2
Justice Patricia O. Cotter delivered the Opinion of the Court.
¶1 We accepted certified questions from the U.S. District Court for the District of
Utah, which we have reformulated in accordance with M. R. App. P. 15(4) and our Order
of July 31, 2012:
¶2 May a person who has settled a claim with a victim then bring an action for
contribution against a joint tortfeasor under § 27-1-703, MCA, even though the victim
never filed a court action?
¶3 Where a defendant in a pending action enters into a settlement with the plaintiff in
advance of trial, does § 27-1-703, MCA (1997), allow the settling defendant to bring a
subsequent contribution action against a person who was not a party in the tort action?
¶4 Does Montana recognize a common law right of indemnity where the negligence
of the party seeking indemnification was remote, passive, or secondary, compared to that
of the party from whom indemnity is sought?
¶5 We answer no to each of these certified questions.
FACTUAL AND PROCEDURAL BACKGROUND
¶6 In February 2007, a small plane owned by Metro Aviation, Inc. (Metro) crashed
near Bozeman, Montana. The pilot, who was an employee of Metro, and both
passengers, Paul Erickson and Darcy Dengel, died in the crash. All three were Montana
residents. Following the accident, Erickson’s estate filed a claim with Metro’s insurers.
(Metro and its insurers will be referred to collectively as Metro.) Metro settled
Erickson’s claim without litigation (Erickson claim). Dengel’s estate filed suit against
Metro (Dengel action) and Metro settled with Dengel’s estate before trial. At no time
3
was the United States a party to the Dengel action nor was it involved in settlement
negotiations with either Erickson’s or Dengel’s estates.
¶7 Metro then filed suit under the Federal Tort Claims Act against the United States
in the U.S. District Court for the District of Montana, alleging negligence by the Federal
Aviation Administration (FAA) air traffic controllers at the air traffic control center in
Salt Lake City, Utah (where Montana air traffic is controlled). Metro asserted alternative
claims of indemnity and contribution and sought to recover, among other losses, the
settlement amounts paid to the Erickson and Dengel estates. The United States moved to
have the case transferred to the U.S. District Court for the District of Utah and the court
granted the motion.
¶8 The United States moved for partial summary judgment on Metro’s indemnity and
contribution claims asserting that under both Utah and Montana law, these claims are
barred. Metro concurred that Utah law bars these claims but argued that Montana law
applies and allows the claims. The federal Utah court concluded that Montana law is
applicable but that Montana law in this area is unsettled. For this reason, the court
certified the above-referenced questions of law to the Montana Supreme Court. We
accepted the court’s certified questions by Order dated July 31, 2012. Oral argument was
held on May 14, 2013.
STANDARD OF REVIEW
¶9 When answering a certified question as permitted by M. R. App. P. 15(3), this
Court’s review is “purely an interpretation of the law as applied to the [pertinent] facts
4
underlying the action.” Thrivent Fin. v. Andronescu, 2013 MT 13, ¶ 6, 368 Mont. 256,
300 P.3d 117 (citation omitted).
DISCUSSION
¶10 This case raises questions pertaining to the rights to contribution and indemnity.
The right of contribution is established by statute, while the right to indemnity invokes
equitable principles. State Farm Fire and Cas. Co. v. Bush Hog, LLC, 2009 MT 349, ¶ 6,
353 Mont. 173, 219 P.3d 1249. Contribution and indemnity are similar in that the
essential purpose of both is to shift one’s losses to another. Bush Hog, ¶ 6. The objective
of contribution is to allocate liability among all responsible parties. Bush Hog, ¶ 7.
Contribution distributes loss among joint tortfeasors by requiring each tortfeasor to pay
his or her proportionate share based upon his or her proportion of the negligence which
proximately caused the plaintiff’s injuries. Durden v. Hydro Flame Corp., 1999 MT 186,
¶ 25, 295 Mont. 318, 983 P.2d 943. Conversely, indemnity “shifts the entire loss from
the one who has been required to pay it to the one who should bear the loss.” Durden,
¶ 25. (Emphasis added.) With these principles in mind, we first address the certified
questions pertaining to contribution.
¶11 May a person who has settled a claim with a victim then bring an action for
contribution against a joint tortfeasor under § 27-1-703, MCA, even though the
victim never filed a court action?
¶12 Section 27-1-703, MCA, entitled “Multiple defendants—determination of
liability,” provides in relevant part:
(1) Except as provided in subsections (2) and (3), if the negligence of a
party to an action is an issue, each party against whom recovery may be
allowed is jointly and severally liable for the amount that may be awarded
5
to the claimant but has the right of contribution from any other person
whose negligence may have contributed as a proximate cause to the injury
complained of.
(2) A party whose negligence is determined to be 50% or less of the
combined negligence of all persons described in subsection (4) is severally
liable only and is responsible only for the percentage of negligence
attributable to that party, except as provided in subsection (3). The
remaining parties are jointly and severally liable for the total less the
percentage attributable to the claimant and to any person with whom the
claimant has settled or whom the plaintiff has released from liability.
(3) A party may be jointly liable for all damages caused by the
negligence of another if both acted in concert in contributing to the
claimant’s damages or if one party acted as an agent of the other.
(4) On motion of a party against whom a claim is asserted for
negligence resulting in death or injury to person or property, any other
person whose negligence may have contributed as a proximate cause to the
injury complained of may be joined as an additional party to the action.
For purposes of determining the percentage of liability attributable to each
party whose action contributed to the injury complained of, the trier of fact
shall consider the negligence of the claimant, injured person, defendants,
and third-party defendants. The liability of persons released from liability
by the claimant and persons with whom the claimant has settled must also
be considered by the trier of fact, as provided in subsection (6). The trier of
fact shall apportion the percentage of negligence of all persons listed in this
subsection. Nothing contained in this section makes any party
indispensable pursuant to Rule 19, Montana Rules of Civil Procedure.
(5) If for any reason all or part of the contribution from a party liable
for contribution cannot be obtained, each of the other parties shall
contribute a proportional part of the unpaid portion of the noncontributing
party’s share and may obtain judgment in a pending or subsequent action
for contribution from the noncontributing party. A party found to be 50%
or less negligent for the injury complained of is liable for contribution
under this section only up to the percentage of negligence attributed to that
party.
. . .
6
(6)(c) Except for persons who have settled with or have been
released by the claimant, comparison of fault with any of the following
persons is prohibited:
(i) a person who is immune from liability to the claimant;
(ii) a person who is not subject to the jurisdiction of the court; or
(iii) any other person who could have been, but was not, named as a
third party.
¶13 Acknowledging that the Erickson claim was settled without any litigation having
been filed, Metro urges this Court to broadly interpret the word “action” contained in
§ 27-1-703, MCA, to include the “process and procedure of a third party making an
insurance claim for damages and the settlement thereof prior to the commencement of a
lawsuit.” In other words, Metro argues that the term “action” in the statute should
encompass the Erickson claim despite the fact that Erickson’s estate did not file a lawsuit
against Metro prior to settling the claim. Metro further asserts that the language of
§ 27-1-703, MCA, grants to a “party” a right of contribution from “any other person”
except in the circumstances set forth in subsections (2) and (3). Under Metro’s proposed
interpretation, the Erickson estate’s insurance claim constitutes an “action,” and the
United States need not have been a “party” to that “action” for Metro to subsequently
seek contribution from the United States.
¶14 The United States counters that the statute, its legislative history and Montana case
law support a conclusion that “a right of contribution exists for parties to a court action
only, and must take place within the original plaintiff’s cause of action.” It maintains that
the only method provided by the Legislature for exercising the right of contribution
against a nonparty is for a defendant to join the “other person” as a party to a case. The
7
United States submits that because Metro settled with the Erickson estate without the
commencement of any litigation, Metro was never made “a party to an action” as
required by § 27-1-703(1), MCA, and enjoys no right of contribution stemming from
Metro’s settlement with the Erickson estate.
¶15 Though there have been many revisions to Montana’s comparative negligence
statute,1 § 27-1-703, MCA, as noted by both parties to this appeal, we focus on the
language of the current statute. As it pertains to Certified Question No. 1, § 27-1-703(1),
MCA, is dispositive: “[I]f the negligence of a party to an action is an issue, each party
against whom recovery may be allowed . . . has the right of contribution from any other
person whose negligence may have contributed . . . to the injury complained of.”
(Emphasis added.) We find no legal support for Metro’s argument that we should
interpret “action” to include the filing of an insurance claim as opposed to the filing of a
lawsuit, nor does Metro provide us with any such authority. The body of case law
addressing contribution among joint tortfeasors under § 27-1-703, MCA, involves
negligence lawsuits in which one party has sued another party in a court of law. We have
never applied § 27-1-703, MCA, in a situation where there was no litigation.
¶16 An “action” is defined as “[a] civil or criminal judicial proceeding” in Black’s Law
Dictionary 28 (Bryan A. Garner ed., 7th ed., West 1999). Moreover, among Montana’s
statutes, “action” is defined in various ways including, (1) “a judicial proceeding or
1
Section 27-1-703, MCA, was enacted in 1977 and amended in 1981, 1987, 1995, and 1997. In
Plumb v. Fourth Judicial Dist. Court, 279 Mont. 363, 927 P.2d 1011 (1996), superseded by
statute, we provided a detailed discussion of § 27-1-703, MCA, from its enactment through the
1995 amendment. We do not repeat this historic review here.
8
arbitration in which a payment in money may be awarded or enforced with respect to a
foreign-money claim” (§ 25-9-702(1), MCA); (2) “a special proceeding of a civil nature”
(§ 27-2-101, MCA); and (3) “any civil lawsuit or action in contract or tort for damage or
indemnity brought against a construction professional to assert a claim . . . for damage or
the loss of use of real or personal property caused by a defect in the construction or
remodeling of a residence” (§ 70-19-426(1)(a), MCA). Further, Black’s Law Dictionary
defines “party” as “one by or against whom a lawsuit is brought.” Black’s Law
Dictionary at 1144. Metro neither qualifies as a “party,” nor does an insurance settlement
qualify as an “action” under these well-established definitions. Lastly, M. R. Civ. P. 3
provides that a civil “action” is commenced by the filing of a complaint with the court.
There having been no action to which Metro was a party, Metro may not now seek
contribution against the United States under § 27-1-703, MCA. We therefore answer no
to Certified Question No. 1. Metro may not seek contribution from the United States
with respect to the Erickson settlement.
¶17 Where a defendant in a pending action enters into a full settlement with the
plaintiff in advance of trial, does § 27-1-703, MCA (1997), allow the settling
defendant to bring a subsequent contribution action against a person that was not
a party in that action?
¶18 We next turn to the question presented with respect to the Dengel action. As noted
above, the Dengel estate filed a negligence action against Metro, and therefore Metro was
a party to a lawsuit as contemplated under § 27-1-703, MCA. However, Metro settled
with the Dengel estate prior to trial without ever joining the United States as a party.
Metro then sought to bring a separate contribution action against the United States.
9
Metro insists that the statute permits a separate and subsequent contribution action, while
the United States asserts that the statute contemplates only one method for exercising the
right of contribution against a nonparty, and that is by way of joinder in the original
action.
¶19 As noted above, the right to contribution is a strictly statutory right. Section
27-1-703(4), MCA, spells out how a party goes about seeking contribution from another
person whose negligence may have contributed to the injury. It provides in pertinent part
that “[o]n motion of a party against whom a claim is asserted for negligence . . . any other
person whose negligence may have contributed as a proximate cause to the injury
complained of may be joined as an additional party to the action.” It further provides that
“[t]he trier of fact shall apportion the percentage of negligence of all persons listed in this
subsection.” Clearly, a single action is contemplated. The sole circumstance under
which a subsequent action for contribution is permitted is that set forth in § 27-1-703(5),
MCA. This section of the statute permits a subsequent action for contribution from the
noncontributing party only where “for any reason all or part of the contribution from a
party liable for contribution cannot be obtained.” Clearly, this provision assumes that
liability for contribution has already been determined in the preceding single action
referenced in § 27-1-703(4), MCA.
¶20 The problem with accepting Metro’s premise that a stand-alone contribution claim
is permitted under the statute is that the statute does not provide how such a claim would
be undertaken. As is obvious from a review of § 27-1-703, MCA, constructing a
procedure and remedy in matters involving multiple defendants is a complicated
10
business. Were we to allow a separate action for contribution, what would be the
parameters? Unlike here—where the plaintiff decedent as a passenger was not capable of
comparative fault—what if the third party named in the stand-alone contribution claim
contended that the plaintiff in the original action was partly at fault? Would this bring the
plaintiff back into a new separate action, after he has already secured his judgment or
settlement and presumably brought finality to the process? What of other settling
parties? These questions call for answers that this Court does not have. It is not the
province of this Court to read into a statute a proceeding that the statute does not
contemplate, nor is it our function to then fashion a procedure for how that case would be
tried. Section 1-2-101, MCA (In statutory construction, courts may “not insert what has
been omitted or . . . omit what has been inserted.”). See also Swanson v. Hartford Ins.
Co., 2002 MT 81, ¶ 22, 309 Mont. 269, 46 P.3d 584.
¶21 Had the Legislature intended to provide a defendant in a pending action the option
to bring a separate subsequent contribution action against a third party, it would have
done so. It did not. We will not presume to do so either. Therefore, we answer the
second question, as reformulated above, no.
¶22 Does Montana recognize a common law right of indemnity where the negligence
of the party seeking indemnification was remote, passive, or secondary, compared
to that of the party from whom indemnity is sought?
¶23 Unlike contribution, indemnity “shifts the entire loss from the one who has been
required to pay it to the one who should bear the loss.” Durden, ¶ 25. Metro seeks
indemnity from the United States, claiming that its own negligence, if any, was remote,
passive, or secondary while the negligence of the FAA was active. It argues that
11
“fundamental fairness” dictates that because it is not in pari delicto with the United
States, the United States should bear responsibility for the entire amount of the
settlements it paid to Dengel and Erickson.
¶24 We reject this argument. In State ex rel. Deere & Co. v. District Court, 224 Mont.
384, 730 P.2d 396 (1986), we observed that fixing responsibility in indemnity actions
premised upon active versus passive conduct, was neither “sensible” nor “practical.”
Deere, 224 Mont. at 398, 730 P.2d at 405-06. In State v. Butte-Silver Bow County, 2009
MT 414, 353 Mont. 497, 220 P.3d 1115, we held that the State could not obtain common
law indemnity from the County, because the State was negligent in part; it lacked “clean
hands.” Butte-Silver Bow County, ¶ 33.
¶25 Again, the premise of indemnity is that the other party should bear the entire loss.
Indemnity would not be fair or appropriate where both parties allegedly are negligent in
causing the plaintiff’s injuries. We have prohibited claims for indemnity between or
among joint tortfeasors. Deere; Consolidated Freightways Corp. v. Osier, 185 Mont.
439, 605 P.2d 1076 (1979); see also Panasuk v. Seaton, 277 F. Supp. 979 (D. Mont.
1968). At common law, “if the concurrent negligence of two or more persons causes an
injury to a third person, they are jointly and severally liable, and the injured person may
sue them jointly or severally, and recover against one or all.” Jones v. Northwestern Auto
Supply Co., 93 Mont. 224, 231, 18 P.2d 305, 307 (1932) (quoting Black v. Martin, 88
Mont. 256, 265, 292 P. 577, 580 (1930)). As Judge Jameson observed in Panasuk, we
recognized the general rule that, in such circumstances, “one of the several wrongdoers
cannot recover against another wrongdoer although he may have been compelled to pay
12
all the damages for the wrong done.” Panasuk, 277 F. Supp. at 980-81 (quoting Variety,
Inc. v. Hustad Corp., 145 Mont. 358, 368, 400 P.2d 408, 414 (1965)). The Legislature
has crafted a mechanism for allocation of responsibility where a plaintiff is injured by the
acts or omissions of multiple tortfeasors. Section 27-1-703, MCA. In such
circumstances, the statute applies, not the common law remedy of indemnity. Section
1-1-108, MCA.
¶26 By law, the pilot in command of an aircraft is directly responsible for the
operation of that aircraft and may take immediate action to meet an in-flight emergency,
notwithstanding deviation from otherwise applicable rules. 14 C.F.R. § 91.3 (1-1-07
edition). Metro acknowledged in its opening brief “that the pilot . . . may have
experienced either a black hole illusion or other type of illusion just prior to the
accident.” It further alluded during oral argument to this problem and to a possible
electrical failure. It thus allowed that there could have been at least some degree of
negligence on the part of Metro. Metro’s claim for indemnity against the United States
must fail under these circumstances in light of the foregoing authorities.
¶27 For the foregoing reasons, we conclude that Metro is not entitled to indemnity
from the United States. We therefore answer the third of the certified questions, no.
/S/ PATRICIA COTTER
13
We Concur:
/S/ MIKE McGRATH
/S/ BETH BAKER
/S/ MICHAEL E WHEAT
/S/ BRIAN MORRIS
/S/ JIM RICE
/S/ LAURIE McKINNON
14
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} |
Affirmed and Memorandum Opinion filed February 12, 2019.
In The
Fourteenth Court of Appeals
NO. 14-17-00216-CV
IN THE MATTER OF THE MARRIAGE OF D.E.L. AND J.J.P.
On Appeal from the 308th District Court
Harris County, Texas
Trial Court Cause No. 2015-32671
MEMORANDUM OPINION
This is an appeal from a final decree of divorce dissolving the parties’ marriage
and adjudicating certain issues pertaining to the parties’ children. As appellant,
Husband asserts the judgment is error for four reasons: (1) the associate judge lacked
authority to rule on certain motions; (2) the trial court erred in granting Wife’s motion
to reconsider, which she filed after the court pronounced judgment orally; (3) the trial
court did not afford Husband an opportunity to object to Wife’s request to change the
children’s last name; and (4) the trial court erred in restricting communication between
the children and Husband, who is incarcerated, to mail correspondence. We affirm the
trial court’s judgment.
Background
Appellant J.J.P. (Husband) and appellee D.E.L. (Wife) were married in 2005 and
have two sons, A.L., 12 years old, and U.L., 10 years old.1 Husband is currently
incarcerated, serving a life sentence without parole. When he committed the offense,
the children were three and one years old, respectively.
Wife filed a petition for divorce on grounds of insupportability, which was
consolidated with a suit affecting the parent-child relationship (SAPCR). Wife asked
to be appointed sole managing conservator, to change the children’s last name from
Husband’s surname to Wife’s maiden name, and to prohibit Husband from having any
contact with the children.
Wife testified that none of Husband’s family offered assistance after his
imprisonment. Husband’s sister occasionally spoke with Wife, but was not a consistent
part of the children’s lives. Wife believed that allowing Husband any contact with the
children “would threaten [their] emotional welfare.” When asked to explain, Wife said:
“They don’t know [Husband]. . . . They were 1 and 3 when this happened.” Wife
testified that she is afraid of Husband, and that Husband is a former gang member.
Wife believes it “would be a source of anxiety, embarrassment, inconvenience
or disruption” to the children if they kept Husband’s last name. Based on conversations
with the children, Wife said that the children “do not identify themselves with that last
name because they don’t know of that person, and they live with their mother and they
are completely fine with changing their name.”
1
The trial court ordered the record sealed. We refer to the parties by generic descriptors and
the parties’ children by their initials. We also describe the factual background as generically as
possible, while fulfilling our responsibility to hand down a public opinion that “explain[s] our
decision based on the record.” Ex parte N.B.J., 552 S.W.3d 376, 378 n.1 (Tex. App.—Houston [14th
Dist.] 2018, no pet.).
2
At the conclusion of the trial, the judge rendered judgment orally, granted Wife’s
petition for divorce, named Wife sole managing conservator, named Husband
possessory conservator, ordered that Wife maintain a post office box for
communication from Husband, granted Husband’s sister visitation with the children on
the first Sunday of alternate months, and ordered the children’s last name changed to
Wife’s maiden name. The judge did not order any child support.
Wife moved for reconsideration with respect to visitation rights by Husband’s
sister. Wife argued that the trial court had no authority to grant Husband’s sister
visitation rights when the sister was not a party to the suit. The trial court held a hearing
on Wife’s motion on January 27, 2017. At Husband’s request, the trial court continued
the hearing until February 15, 2017. Following the hearing, the trial court granted
Wife’s motion to reconsider. The trial court then signed a final decree of divorce,
which was identical to the oral rendition, except that the final decree did not award any
visitation to Husband’s sister.
No party requested additional findings of fact and conclusions of law. Husband
appeals.
Standards of Review
Common standards of review apply to several of Husband’s issues, so we discuss
them at the outset.
Husband challenges certain decisions the trial court made in its discretion. When
we review rulings for an abuse of discretion, we determine whether the trial court acted
arbitrarily or unreasonably or if it clearly failed to correctly analyze the law or apply
the law to the facts presented. See In re P.A.C., 498 S.W.3d 210, 217 (Tex. App.—
Houston [14th Dist.] 2016, pet. denied).
3
Husband also at times challenges the sufficiency of the evidence. “Insufficient
evidence” is not an independent issue when the standard of review is abuse of
discretion; sufficiency of the evidence is merely a factor to consider. See In re H.S.B.,
401 S.W.3d 77, 81-82 (Tex. App.—Houston [14th Dist.] 2011, no pet.); In re R.T.K.,
324 S.W.3d 896, 899 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). In
determining whether the trial court abused its discretion because the evidence was
legally or factually insufficient, we consider whether the record contains some
evidence of “a substantial and probative character” to support the trial court’s decision.
H.S.B., 401 S.W.3d at 82.
Accordingly, the abuse of discretion standard under these circumstances
involves a two-pronged analysis: (1) whether the trial court had sufficient information
upon which to exercise its discretion; and (2) whether the trial court erred in applying
its discretion under the appropriate legal authorities. Id.; In re Marriage of McNelly,
No. 14-13-00281-CV, 2014 WL 2039855, at *11 (Tex. App.—Houston [14th Dist.]
May 15, 2014, pet. denied) (mem. op.).
Further, because the record does not reflect that findings of fact were requested
or signed, we infer that the trial court found all facts necessary to support its judgment.
See P.A.C., 498 S.W.3d at 217. Under these circumstances, we review the record to
determine whether some evidence supports the judgment and the implied findings,
considering only the evidence most favorable to the judgment and upholding the
judgment on any legal theory supported by the evidence. Id.
Analysis
A. Wife’s Motion to Reconsider
In his first two issues, Husband challenges the relief granted in the trial court’s
order on Wife’s motion to reconsider and final decree, which omitted visitation rights
4
for Husband’s sister. In his first issue, Husband argues that the associate judge who
ruled on Wife’s motion to reconsider lacked authority to do so, and the resulting order
granting reconsideration is thus void.
At the time of these proceedings, Judge James Lombardino was the judge of the
308th Judicial District Court of Harris County, Texas. Judge Lombardino presided
over the trial, as well as the first part of the hearing on Wife’s motion to reconsider.
Judge David Sydow, an associate judge, held the resumed hearing and signed the order
granting Wife’s motion to reconsider. Judge Lombardino then signed the final decree
of divorce, which incorporated the relief granted in the order on Wife’s motion to
reconsider. On appeal, Husband argues that because there is no written order assigning
the case to an associate judge, Judge Sydow was not authorized to rule on the motion
to reconsider.2
We need not decide whether Judge Sydow held statutory authority to rule on
Wife’s motion to reconsider, because Judge Lombardino had authority to modify the
judgment at any point during the court’s plenary power. See Matter of Marriage of
Williams, No. 14-15-00090-CV, 2016 WL 2997094, at *1 (Tex. App.—Houston [14th
Dist.] May 24, 2016, no pet.) (mem. op.) (appellate courts interpret variances between
a judge’s oral rendition and the final decree to effectively be modifications). Assuming
for the sake of argument that Judge Sydow lacked authority to rule on Wife’s motion
for reconsideration, Judge Lombardino granted the same relief in the final judgment
and Husband has not challenged his authority to do so or the validity of the final
2
See Tex. Fam. Code § 201.005(a) (a judge of a court may refer to an associate judge a suit
involving the marriage relationship or protection of the family over which the court has jurisdiction,
including any matter ancillary to the suit); § 201.006(a) (judge of the referring court shall render an
individual order of referral or a general order of referral specifying the class and types of cases to be
heard by the associate judge).
5
judgment. Thus, the ruling granting Wife’s motion for reconsideration does not fail
for voidness.
We therefore turn to Husband’s second issue, in which he contends that omitting
visitation rights for Husband’s sister in the final decree was an abuse of discretion.3
Wife sought reconsideration of the visitation issue on the ground that Husband’s sister
was not a party to the proceedings. It is undisputed that Husband’s sister was not a
named party and did not intervene in the consolidated divorce/SAPCR proceeding.4 In
the absence of a non-parent’s intervention, the trial court has no authority to award any
non-party visitation. See In re H.R.L., 458 S.W.3d 23, 31 (Tex. App.—El Paso 2014,
orig. proceeding) (trial court had no jurisdiction to award grandmother relief without
first determining she had standing and granting her leave to intervene); see also Tex.
Fam. Code § 102.004(b) (“the court may grant a grandparent or other person . . . leave
to intervene in a pending [SAPCR] suit . . . ”); In re Marriage of Campbell, No. 06-08-
00088-CV, 2009 WL 483602, at *5 (Tex. App.—Texarkana Feb. 27, 2009, no pet.)
(mem. op.) (granting visitation to non-party in divorce was abuse of discretion in the
absence of evidence showing intervention of non-party and in the absence of evidence
that the children’s denial of access to non-party would significantly impair their
emotional well-being). We conclude that the trial court correctly analyzed and applied
the law regarding the issue raised in Wife’s motion for reconsideration and did not
abuse its discretion in granting relief.
3
In his prayer, Husband asks the court “to re[c]ite the names of all parties by amending the
judgment to include the names of all parties.” We liberally construe this request, along with
Husband’s briefed arguments, as challenging the trial court’s omission of visitation rights for
Husband’s sister.
4
Husband notes that he signed a statutory durable power of attorney in favor of his sister. See
Tex. Est. Code §§ 751.001 et seq. This fact does not alter our analysis of the pertinent issue;
Husband’s sister made no attempt to intervene in her individual capacity to claim any right of
visitation.
6
Husband also argues that the trial court erred in granting Wife’s motion to
reconsider without affording Husband a meaningful opportunity to be heard. Husband
complains that he lacked a sufficient amount of time to respond to Wife’s motion before
the hearing, resulting in surprise, prejudice, and a violation of his constitutional right
to due process.5
We disagree that Husband lacked a meaningful opportunity to respond to Wife’s
motion, that he suffered surprise and prejudice, or that his due process rights were
violated. The record indicates that Husband appeared by telephone during the hearing
on Wife’s motion to reconsider. At Husband’s request, the trial court continued the
hearing to allow Husband the opportunity file a response. Husband filed a written
response before the hearing resumed on February 15, 2017.
Given that Husband had notice of Wife’s motion to reconsider, appeared
telephonically at the hearing, successfully requested the court continue the hearing to
allow time to file a response, filed a response, and appeared telephonically when the
hearing resumed, we conclude that he received the due process contemplated under the
United States and Texas Constitutions. See Perry v. Del Rio, 67 S.W.3d 85, 92 (Tex.
2001) (recognizing that Texas Constitution’s “due course of law provision at a
minimum requires notice and an opportunity to be heard at a meaningful time and in a
meaningful manner”); Derbigny v. Bank One, 809 S.W.2d 292, 295 (Tex. App.—
5
Husband also contends that the trial court could not set Wife’s motion for hearing earlier
than twenty-one days after she filed it, citing Texas Civil Practice and Remedies Code section
74.351(a) and Harris County Local Rule 3.8. Neither the statute nor the rule supports Husband’s
argument. Section 74.351 governs service of expert reports in medical malpractice cases and thus
does not apply to this divorce proceeding. See Tex. Civ. Prac. & Rem. Code § 74.351(a). Local Rule
3.8 provides that all judgments and orders must be submitted to the court for signing within ten days
from the date of rendition, unless otherwise directed by the court; the rule has no bearing on the
submission date for Wife’s motion to reconsider. See Harris Cty. Fam. Loc. R. 3.8.
7
Houston [14th Dist.] 1991, no writ) (“Fundamental to the concept of due process is the
right to be heard.”).
For these reasons, we overrule Husband’s first and second issues.
B. Children’s Name Change
In his third issue, Husband challenges the trial court’s decision to change the
children’s surname to Wife’s maiden name. Husband argues that the trial court abused
its discretion by substantively granting that relief and by failing to afford Husband an
opportunity to object to Wife’s name-change request.
We review a trial court’s decision to change the name of a minor child for an
abuse of discretion. See H.S.B., 401 S.W.3d at 81.
1. Changing children’s surname
Husband argues that insufficient evidence supports the trial court’s
determination that changing the children’s last name is in their best interest.6
In Texas, the primary concern in determining whether to change a child’s name
is the child’s best interest—not the interests of the parents. See Tex. Fam. Code §
45.004(a)(1); H.S.B., 401 S.W.3d at 83. Texas courts, including this court, have
6
Husband also argues that Wife’s petition to change the children’s surname did not comport
with statutory requirements. See Tex. Fam. Code § 45.002 (requirements of petition to change the
name of a child). In her live pleading, Wife requested that her children’s last name be changed, but,
contrary to statutory requirements, she did not include written consents from the children, who were
both over ten years old. Id. § 45.002(b) (“If the child is 10 years of age or older, the child’s written
consent to the change of name must be attached to the petition.”). The record before us, however,
does not show that Husband specially excepted to the sufficiency of the petition or called the missing
written consent to the trial court’s attention. Consequently, Husband has waived any error presented
by the lack of a written consent. See In re C.C.N.S., 955 S.W.2d 448, 449 (Tex. App.—Fort Worth
1997, no pet.) (mother waived complaint that father’s pleadings did not meet statutory requirements
for requesting a name change by failing to object in the trial court); see also In re Adams, No. 01-00-
00496-CV, 2001 WL 1168278, at *1-2 (Tex. App.—Houston [1st Dist.] Oct. 4, 2001, no pet.) (not
designated for publication) (same).
8
applied at least six non-exclusive factors to determine whether a name change is in a
child’s best interest. H.S.B., 401 S.W.3d at 84. Courts are not required to attribute the
same weight to each factor in a given case. See id. Each factor’s significance depends
on the facts of a case, so one or more factors may be irrelevant to a dispute. See id.
We consider the following factors:
(1) whether the name change would reduce anxiety, embarrassment,
inconvenience, confusion, or disruption for the child, which may include
parental misconduct and the degree of community respect (or disrespect)
associated with the name;
(2) whether the name change would help the child identify with a family
unit;
(3) whether the parent whose surname the child will bear assures that the
parent will not change his or her surname in the future;
(4) the length of time the child has used a name and the level of identity
the child has with the name;
(5) the child’s preference; and
(6) the parent’s true motivations for requesting the name change.
See id.
Wife expressed her concern that Husband’s last name has “negative
associations” considering his incarceration for a gang-related murder. When asked if
she is “concerned that classmates may eventually Google the boys’ names and
[Husband’s] name will come up,” Wife said yes, that she is worried that Husband’s
name would make her children “an easy target to be bullied.” Additionally, Wife is
concerned that the name would come up on potential employers’ background checks.
Wife mails family Christmas cards, which state only Wife’s maiden name. Wife also
testified that she would not change the children’s last name again, such as if she were
to remarry. Finally, Wife testified that the children “are completely fine with changing
their name,” because they do not know Husband and do not identify with Husband’s
9
surname. Thus, substantial and probative evidence supports at least five of the six
factors in favor of the name change. See id. Husband asserts in his brief that Wife
wants to change the children’s name out of vindictiveness, but no evidence supports
this allegation. The trial judge listened to the testimony first-hand, and credibility
decisions of this sort are committed to the judge’s substantial discretion. See Matter of
Marriage of Harrison, 557 S.W.3d 99, 121 (Tex. App.—Houston [14th Dist.] 2018,
pet. filed); In re A.L.E., 279 S.W.3d 424, 427 (Tex. App.—Houston [14th Dist.] 2009,
no pet.)
After weighing the factors and construing the evidence in the light most
favorable to the judgment, we conclude that Wife presented sufficient evidence to
support the trial court’s implied finding that the name change is in the children’s best
interest. See In re J.N.L., 528 S.W.3d 237, 244-45 (Tex. App.—Houston [14th Dist.]
2017, no pet.).
2. Opportunity to object
Husband also argues that his due process rights were violated because the court
did not allow him to testify regarding the proposed name change or afford him a chance
to object to Wife’s request.
As detailed above, Wife testified about her desire to change the children’s last
name, and her reasons for doing so. Husband did not object during the hearing. When
he cross-examined Wife, Husband did not ask her any questions regarding the
requested name change. Wife called Husband as a witness, but did not ask him any
questions regarding the children’s surname. After his direct examination, the trial
judge asked, “[Husband], do you have anything else that you want to say?” Husband
then testified at length about his love for his children and his desire to connect with his
children “through letters, through visitation.” The trial judge again asked, “Anything
else?” Husband responded that he was financially responsible when he, Wife, and the
10
children were living together. The judge then stated, “All right. Anything else before
I -- I’m going to render.” Husband did not say anything further or object. Then the
judge announced its ruling, including the “[n]ame change granted for the children.”
The judge asked Husband, “do you have any questions about the rendition,” and
Husband responded that he “couldn’t hear.” The judge then repeated the entire
rendition, including the name change. Husband did not object to the form of the
judgment as rendered orally. Following oral rendition but before the court signed the
final decree, Husband filed a written objection to Wife’s name change request. The
court signed the final decree three days later.
The record indicates that Husband participated meaningfully at trial. He cross-
examined Wife and testified on his own behalf. The judge accommodated Husband’s
participation by phone, including repeating statements or questions when Husband
indicated that he could not hear the proceedings. There is no indication that Husband’s
testimony was hindered or limited. Neither at the conclusion of the evidence nor after
the court’s rendition did Husband object to Wife’s request to change the children’s last
name. After the court announced that it granted the name change, Husband filed a
written objection to the name change, which stated his position on the name change
issue. By later signing a final judgment granting the name change, the trial court
impliedly overruled Husband’s objection.
We conclude that Husband received an opportunity to be heard “at a meaningful
time and in a meaningful way.” Perry, 67 S.W.3d at 92. No due process violation
appears on this record regarding the children’s name change.
* * *
Sufficient evidence supports the trial court’s finding that the name change is in
the children’s best interest. Further, this record does not support Husband’s contention
that he was not afforded a fair opportunity to object to the children’s name change. For
11
these reasons, we hold that the trial court did not abuse its discretion in ordering that
the children’s surname be changed to Wife’s maiden name.
We overrule Husband’s third issue.
C. Limited Communication
In his fourth issue, Husband argues that the trial court erred in ordering that the
children and Husband may communicate only by mail correspondence.
1. Applicable law and standard of review
The terms of an order imposing restrictions or limitations on a parent’s right to
access to a child may not exceed those required to protect the child’s best interests. See
Tex. Fam. Code § 153.193. Complete denial of access should rarely be ordered. See
Tran v. Nguyen, 480 S.W.3d 119, 125 (Tex. App.—Houston [14th Dist.] 2015, no pet.);
In re Walters, 39 S.W.3d 280, 286-87 (Tex. App.—Texarkana 2001, no pet.). A parent
appointed possessory conservator normally should have periodic visitation privileges
with his or her child and should not be denied such privileges altogether except in
extreme circumstances. Tran, 480 S.W.3d at 126.
We review a trial court’s determination of conservatorship and access issues
under an abuse of discretion standard. In re J.A.J., 243 S.W.3d 611, 616 (Tex. 2007);
Cain v. Cain, No. 14-07-00115-CV, 2007 WL 4200638, at *3 (Tex. App.—Houston
[14th Dist.] Nov. 29, 2007, no pet.) (mem. op.).
2. Application
By appointing Husband possessory conservator, the trial court necessarily found
that his appointment was not a danger to the children’s physical or emotional welfare.
However, by severely restricting Husband’s access to and contact with the children,
the trial court must have also determined that the children’s interests are best served if
Husband’s communication with them is limited to mail correspondence. Husband
12
argues that the trial court’s decision is against the weight of evidence presented, which
is a challenge to the sufficiency of the evidence. We therefore decide whether
sufficient evidence of a substantial and probative character supports the trial court’s
decision. See H.S.B., 401 S.W.3d at 81-82.
The children were one and three years old when Husband committed the offense
for which he is now incarcerated. The children have never visited Husband at the
prison. The children told Wife that they do not know Husband. Wife testified that she
was worried that allowing the children to speak to Husband on the phone or visit him
in prison would threaten the children’s emotional welfare. Wife has “honestly . . . not
found a way to tell them” that Husband is in prison, the crime of which he was
convicted, or the sentence he is serving. Wife is afraid of Husband and wants to shield
her children from him, in part because she says he once belonged to a gang and because
he was convicted of a gang-related murder.7
On these facts, we cannot say that the trial court abused its discretion in limiting
contact between the children and Husband to mail correspondence only. See
Malekzadeh v. Malekzadeh, Nos. 14-05-00113-CV & 14-06-00341-CV, 2007 WL
1892233, at *4 (Tex. App.—Houston [14th Dist.] July 3, 2007, pet. denied) (mem. op.)
(evidence supported trial court’s implied finding that allowing incarcerated father to
have access to children beyond mail correspondence would not be in children’s best
interest); In the Interest of C.U., No. 13-03-566-CV, 2004 WL 1921227, at *4 (Tex.
App.—Corpus Christi Aug. 30, 2004, no pet.) (mem. op.) (trial court took into account
the needs and best interest of child, the circumstances of the conservators, and other
relevant factors when limiting parents’ conservatorship on the basis that parent had
been incarcerated for essentially child’s entire life and a relationship had not developed
7
Husband asserts that he was convicted wrongly.
13
between parent and child); accord also Lair v. Lair, No. 02-12-00249-CV, 2014 WL
2922245, at *6 (Tex. App.—Fort Worth June 26, 2014, no pet.) (mem. op.) (no abuse
of discretion in limiting incarcerated father’s access to children to once-weekly, fifteen-
minute telephone call).
We overrule Husband’s fourth issue.
Conclusion
Having overruled all of Husband’s issues on appeal, we affirm the trial court’s
judgment.
/s/ Kevin Jewell
Justice
Panel consists of Justices Jewell, Zimmerer, and Spain.
14
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575 F.Supp. 1359 (1983)
Karen HARPER, et al., Plaintiffs,
v.
ELI LILLY AND COMPANY, Defendants.
No. C79-2094.
United States District Court, N.D. Ohio, E.D.
November 15, 1983.
Thomas L. Dettelbach, Kahn, Kleinman, Yanowitz & Arnson, L.P.A., Cleveland, Ohio, for plaintiffs.
Marc L. Swartzbaugh, Jones, Day, Reavis & Pogue, Cleveland, Ohio, Lane D. Bauer, Leo P. Dreyer, Shook, Hardy & Bacon, Kansas City, Mo., for defendants.
MEMORANDUM OPINION AND ORDER
BATTISTI, Chief Judge.
This matter is before the Court today on defendant Eli Lilly and Company's Motion for Summary Judgment. Under F.R.C.P. 56, the Court must view the evidence in the light most favorable to the party opposing the motion and may not grant summary judgment unless the movant has conclusively shown that no genuine issue of material fact exists. Smith v. Hudson, 600 F.2d 60 (6th Cir.), cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979); Tee-Pak, Inc. v. St. Regis Paper Co., 491 F.2d 1193 (6th Cir.1974). For the reasons listed below, the Court denies defendant's motion for summary judgment.
I.
During her pregnancies with plaintiffs in 1951 and 1955, plaintiffs' mother, Mrs. Jane Harper, was prescribed diethylstibestrol (DES), a synthetic estrogen manufactured and marketed by defendant for the prevention of miscarriage during pregnancy. Plaintiffs, citizens of New York and Ohio, allege that as a result of their mother's ingestion of DES they have suffered *1360 myriad physical injuries and abnormalities and bring this diversity suit against defendant, a citizen of Indiana with its principal place of business in Indiana, whom plaintiffs allege manufactured and marketed the DES taken by their mother. In moving for summary judgment, defendants claim that plaintiffs' suit is barred by the relevant Ohio statute of limitations, Ohio Rev. Code § 2305.10 (1978), which limits the time in which an action for bodily injury may be brought to two years after the cause thereof arose. The determination of whether plaintiffs' claims are timely requires that the Court undertake a careful evaluation of the facts surrounding this matter and of Ohio law considering "discovery rule" exceptions to the Ohio limitations statute at issue in this case.
A. DES was first produced in 1938. After 1945 it was frequently prescribed to women in the United States to prevent against possible miscarriage. It has been estimated that between four and six million Americans, mothers and their children, were exposed to DES during pregnancy. In 1970 a study revealed the existence of a rare cancer, clear cell adenocarinoma, in seven females aged fourteen to twenty two. These seven cases were greater in number than the number of all previously reported cases of the disease. A follow-up epidemiologic study in 1971 of the seven cases, in addition to an eighth case subsequently reported, revealed that the mothers of seven of the eight females had been treated with DES during their pregnancies. Later studies showed a relationship between the risk of carcinoma and intrauterine exposure to DES. The study also noted a relationship between such interuterine exposure and other abnormal vaginal conditions, including adenosis, a precancerous epithelial infirmity, and cervical ridges or hoods, abnormal formations of the tissues of the cervix. See Scully, R.E., Robboy, S.J., Herbst, A.L.: Vaginal and Cervical Abnormalities, including Clear-Cell Adenocarcinoma, Related to Prenatal Exposure to Stilbestrol. Annals of Clinical and Laboratory Science 4:222 (1974); Information for Physicians, DES Exposure In Utero, DHEW Publication No. (NIH) 77-1119 [1977]. Based on such studies, the Food and Drug Administration contraindicated the use of DES during pregnancy in November 1971.
B. Karen Harper: Plaintiff Karen Harper Lundquist[1] was born on August 3, 1951. During her teenage years she suffered occasionally from vaginal infections, irritations, and discharges but sought no treatment until 1974. Starting in 1974, she was diagnosed at Planned Parenthood in Cleveland as having trichomona, an infection caused by a protozoan, and was treated at Metropolitan Hospital Center in New York, New York for the condition. She continued to experience vaginal and urinary infections and irritations over the next few years, being prescribed creams and drugs for the conditions each time she sought medical attention. When she experienced severe pain in her pelvic region in September 1977, she sought additional medical attention and was given similar drugs and treatment. At this time, Karen Harper had never been given an opinion of the cause of her problems by any of the physicians whom she had visited.
When plaintiffs Karen and Cynthia Harper were home for the Christmas holidays at their parents in December of 1977, Jane Harper informed plaintiffs for the first time that she had taken DES during their pregnancies. Mrs. Harper told her daughters that she had been reading of the problems of DES daughters and felt that they should be aware of their intrauterine exposure to DES.
In May 1978, plaintiff Karen Harper visited the Cytology Clinic at Metropolitan Hospital and was told that she had a lesion on her cervix and that her cervix was disformed. As plaintiff by this time knew of her intrauterine exposure to DES, she informed the personnel at the Clinic of the fact, and was informed that her condition *1361 probably resulted from the DES exposure. The Clinic suggested a larger biopsy and possible surgery for plaintiff's condition. Thereafter, plaintiff visited Dr. Bud Wentz in Cleveland, Ohio on June 2, 1978 for a second opinion.
During Karen's visit to Dr. Wentz, Dr. Wentz diagnosed her condition as adenosis. Dr. Wentz also connected plaintiff's problem with her intrauterine exposure to DES. He described adenosis as a condition altering the mucous-secreting tissues of the vagina and opined that plaintiff's vaginal discharges over the prior years were caused by the adenonsis.
Cynthia Harper: Plaintiff Cynthia Harper was born on April 6, 1955. She experienced an initial vaginal discharge in 1961 and then beginning in the summer of 1973 experienced recurrent discharges. She sought medical treatment for her problems and was given various vaginal suppositories. The discharges and irritations continued sporadically throughout the following years and she sought recurrent treatment, both in Cleveland and in Athens, Ohio, where Cynthia was a student attending Ohio University.
No medical authority ever diagnosed Cynthia as having adenosis or related her problems to her exposure to DES. At Ohio University Health Service in February 1974, Cynthia was diagnosed as having cervical erosion and slight redness in her cervical area. Cynthia related being told of such problems, but not of any medical opinion as to their causation.
Cynthia's first knowledge of her exposure to DES came over the Christmas holidays in 1977 in a discussion with her mother, which has been previously detailed. She visited several doctors in 1978 for her recurrent vaginal problems, including one Dr. John Sanders. Dr. Sanders was Jane Harper's physician during her pregnancies and the individual who originally prescribed DES to Mrs. Harper, and it was he who later suggested to Mrs. Harper that she tell her daughters of their intrauterine exposure to DES. She was not given a definite diagnosis of adenosis caused by intrauterine exposure until 1979, when she also visited Dr. Bud Wentz.
II.
This suit was filed by plaintiffs Karen and Cynthia Harper on November 7, 1979. Therefore, the Court must now ascertain the relevant Ohio rule governing the application of the statute of limitation in this case. In this diversity suit, we sit as a court in Ohio and apply the law that an Ohio State court would, Erie Ry. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Although no Ohio court has spoken to the proper application of the discovery rule in suits involving DES, the Supreme Court of Ohio has recently delivered opinions concerning the propriety of adopting a discovery rule in latent disease and injury cases. Based on those cases, the Court concludes that use of the Ohio discovery rule prevents the finding that plaintiffs' claims are time-barred.
A. Discovery rules, under which a party's claim is said not to accrue until a time when a plaintiff has an actual legal claim for relief, have been increasingly adopted by courts faced with suits claiming injury from latent diseases. Where a party has allegedly been injured by a product whose toxicity has not produced any ascertainable injury simultaneous to its contact with the plaintiff, the courts have allowed plaintiffs to initiate suit at the time when the plaintiff later experiences a medically and legally cognizable injury. The policy behind discovery rules are then adapted to different factual settings as they arise, balanced against the countervailing policies of repose that prompted the use of limitation periods in the first place. Although different states' courts have seen it proper to limit claims at different times, a general progression has been described by one court as follows:
When the injury is latent, the claim is held not to accrue until the plaintiff discovers the injury. Where causation of an injury is unknown, the action accrues when both the injury and its cause have been (or should have been) discovered. *1362 Where the injury and causation are known, but not that there has been any wrongdoing, the action is held to accrue when the plaintiff discovered, or by due diligence should have discovered, the wrongdoing.
Dawson v. Eli Lilly and Company, 543 F.Supp. 1330, 1338 (D.D.C.1982); accord O'Stricker v. Jim Walter Corp., 4 Ohio St.3d 84, 447 N.E.2d 727, 730-731 (1983).
For states adopting a discovery rule, the two major variants are a rule tying accrual of a claim to the manifestation of a latent disease or injury, see Clutter v. Johns-Manville Sales Corp., 646 F.2d 1151 (6th Cir.1981), and a rule tying accrual to the discovery of both the latent disease or injury and of the relationship between such disease and its cause, see Raymond v. Eli Lilly & Co., 117 N.H. 164, 371 A.2d 170 (D.N.H.1977). A "manifestation" rule identifies the commencement of the limitations period "at the time the diseases manifested.... [A] disease is manifested at the time there is an outward, perceptible sign of the disease and not at the time that the cause of the disease has, or reasonably should have been, discovered." Johnson v. Koppers Co., 524 F.Supp. 1182, 1191 (N.D. Ohio 1981). A discovery rule tied to causation, on the other hand, links the commencement of the limitations period to the date when the plaintiff learns, or should have learned, that his or her injury is not simply misfortune but rather the result of an undisclosed defect in defendant's product. Dawson v. Eli Lilly and Company, 543 F.Supp. 1330, 1337 (D.D.C.1982); see also Renfroe v. Eli Lilly & Co., 541 F.Supp. 805, 810 (E.D.Mo.), aff'd 686 F.2d 642 (8th Cir.1982); Raymond v. Eli Lilly & Co., 117 N.H. 164, 371 A.2d 170, 174 (1977). The latter cases reason that a plaintiff cannot be reasonably expected to ascertain the cause of the many developing latent diseases on his or her own and that accrual should therefore not begin until a plaintiff has had time to seek and obtain professional medical diagnosis. See, e.g., Fusco v. Johns-Manville Prods. Co., 643 F.2d 1181 (5th Cir.1981); Aerojet-General Shipyards, Inc. v. O'Keefe, 413 F.2d 793 (5th Cir.1969); Velasquez v. Fireboard Paper Prods., 97 Cal.App.3d 881, 159 Cal.Rptr. 113 (Ct.App. 1979). See also O'Brien v. Eli Lilly & Co., 668 F.2d 704, 713-20 (3d Cir.1981) (Higginbotham, J. dissenting).
The distinctions between discovery rules tied to manifestation and causation at times mandate different results. At other times, however, the differences in the cases, when reviewed against their specific facts, reveal only differences in semantics. This result is in part due to the difficulty, if not outright impossibility, in defining an exact date when an "injury" is either "manifested" or "discovered" in diseases involving long periods of latency and development. Thus, a court may be faced with distinguishing an unidentified and recurring cough or pain from a more permanent shortness of breath or injury as a disease progresses through biological and chemical periods to a full-fledged disability. As will be shown later, many courts when faced with the task of identifying a specific date of manifestation of injury have adopted dates more closely identified with discovery of significant injury or causation. Before the Court progresses to a discussion of these cases, however, it is necessary to state the Ohio discovery rule which will be applied to this matter.
B. Recently, the Supreme Court of Ohio has pronounced extensions in discovery rules in both latent disease and medical malpractice claims. Oliver v. Kaiser Community Health Found., 5 Ohio St.3d 111, 449 N.E.2d 438 (1983); O'Stricker v. Jim Walter Corp., 4 Ohio St.3d 84, 447 N.E.2d 727 (1983). These extensions have come on top of other changes in law concerning accrual of causes of action. Prior to 1972, the Ohio courts appeared to espouse a strict rule of accrual, holding generally that a cause of action accrued on the date of the act or omission causing injury, even if the injury was not contemporaneous with the act or omission. In 1972, however, the Supreme Court of Ohio held that where a surgeon negligently left foreign objects in a patient's body causing injury, that the cause of action against the doctor did not *1363 accrue until the patient discovered, or by the exercise of reasonable diligence should have discovered, the negligent act. Melnyk v. Cleveland Clinic, 32 Ohio St.2d 198, 290 N.E.2d 916 (1972). The rule required both the discovery of the foreign object and the cause thereof.
The first courts to deal with limitation periods for latent disease cases in Ohio were the federal courts sitting in diversity. In 1981, the Sixth Circuit, applying what they considered to be an accurate expression of Ohio law, held that in an action brought by a plaintiff suffering from asbestosis the cause of action accrued when the disease became manifested. Clutter v. Johns-Manville Sales Corp., 646 F.2d 1151 (6th Cir.1981). The Court defined manifestation as the time when "some symptoms are present and one could have discovered the injury had one made an appropriate investigation as to the cause even though the symptoms were not such that a reasonable person would have investigated the cause." Id. at 1154. Therefore, the Court held that plaintiffs, whose last exposure to asbestos-containing products was many years before they received diagnosis of asbestos-related diseases, had timely brought their suits within two years of their respective diagnoses.
Earlier this year, the Supreme Court of Ohio faced the issue of accrual in cases concerning latent diseases. In O'Stricker v. Jim Walter Corp., 4 Ohio St.3d 84, 447 N.E.2d 727 (1983), the Supreme Court of Ohio went beyond the rule espoused in Clutter and held in a case involving asbestosis that a cause of action arose "upon the date when the plaintiff is informed by competent medical authority that he has been injured, or upon the date on which, by the exercise of reasonable diligence, he should have become aware that he had been injured, whichever date occurs first". O'Stricker, 4 Ohio St.3d at 90, 447 N.E.2d at 732.[2]
In O'Stricker, plaintiff noticed shortness of breath, loss of balance, difficulty in swallowing and hoarseness sometime prior to November 1978. Upon consulting a physician, he learned of the possible relationship between his illness and his work as a fireproofer, which had caused him to come into contact with asbestos. In June 1979 a biopsy diagnosed plaintiff as suffering from squamous cell cancer of the larynx, for which surgery was undertaken in December 1979. Plaintiff filed suit in August 1979.
In its opinion, the Supreme Court of Ohio noted the opposing concerns addressed in discovery rules and in statutes of limitations and chronicled the evolution of discovery rules in other states. In considering the development of discovery rules in other states the Court found persuasive the reasoning in many cases that adopted a rule expressed in terms of both discovery of injury and of the cause of the injury. Specifically, the Court cited with approval Raymond v. Eli Lilly & Co., 117 N.H. 164, 371 A.2d 170 (1977), where the Supreme Court of New Hampshire held that a cause of action for a drug-related injury did not accrue until plaintiff knew she was injured and also knew that her injury may have been caused by defendant's conduct.[3] The *1364 Court, after finding the equities to call for the introduction of a discovery rule, found that latent diseases were analogous to the hidden instruments involved in Melnyk and called for a similar discovery rule requiring both discovery of the disease and the cause thereof. 4 Ohio St.3d at 90, 447 N.E.2d at 732. The Court then went on to hold that plaintiff's suit was filed within the relevant two years limitation period.[4]
III.
Thus, the relevant rule to be applied to plaintiffs Karen and Cynthia Harper's claims is whether they knew or should have known that they were injured by a defect in defendant's product prior to November 7, 1977. In stating that plaintiffs' claims did indeed accrue before that time, defendant points to the recurrent vaginal discharges and infections suffered by the plaintiffs prior to 1977 that plaintiffs allege were caused by their intrauterine exposure to DES. Arguing that the plaintiffs were aware of their injuries prior to 1977, even though their injuries were not diagnosed as adenosis or ascribed by medical authority as being caused by DES, defendant alleges that the claims are barred.
Defendant's argument misses the Supreme Court of Ohio's concerns in O'Stricker where the court spoke of a two-part rule requiring both discovery of the injury and the cause thereof. In this case although plaintiffs were aware of nonspecific symptoms in the years prior to 1977, when they sought and obtained treatment for their conditions, the medical authorities were unable to give their opinion as to the causes. This is not a case where a party should have, but did not, consult with medical help for an unknown condition where prompt medical attention would have resulted in proper diagnosis. Furthermore, plaintiffs did not even know that they had been exposed in utero to DES until the Christmas holidays in 1977. Any result other than the one reached today would require the plaintiffs to have initiated suit at a point when competent medical help could not diagnose their illnesses and when they were, without fault, unaware of their exposure to DES. Such a result would be diametrically opposed to the concerns and result in O'Stricker, where the plaintiffs knew they had been earlier exposed to asbestos and where the medical knowledge of asbestos-related diseases was greater than that surrounding DES. The Court cannot and will not put such an impossible burden on the plaintiffs.
Furthermore, the Court notes that, on the facts presented, it would be unable to hold on a motion for summary judgment that plaintiffs' claim would have been untimely under the manifestation rule announced in Clutter, now effectively overruled by O'Stricker. In Donlin v. Abbott Laboratories, C81-1385Y (N.D.Ohio, March 1, 1983), ruled on before the Supreme *1365 Court of Ohio's decision in O'Stricker, Judge Krenzler of this Court held that another DES suit was time-barred under the Clutter rule. In Donlin, plaintiff experienced pains on her right side in late 1978 and consulted with a physician. In January 1979 the physician noted an ovarian tissue mass. When the mass did not disappear plaintiff had a sonogram performed on July 2, 1979, at which time plaintiff's condition was clearly revealed to her. Plaintiff underwent surgery to remove the ovarian mass later in July 1979 and filed suit on July 8, 1981.
In holding that plaintiff's condition "manifested" itself prior to July 8, 1979, the Court held that for purposes of the statute of limitations the condition became manifest no later than July 2, 1979 when "plaintiff's uterine condition had been sufficiently revealed by subjective symptomology and objective verification so that ... there was an awareness by plaintiff and one of her treating physicians that an abnormal mass was present". The Court noted that the probable date of manifestation might have been as early as January 1979, when plaintiff's physician ascribed to her the discovery of an ovarian mass.
The Donlin case, however, is important for the purposes of this case for what it did not hold, namely that plaintiff's pains in late 1978 were not sufficient to equal "manifestation" of her injury.[5] Thus, it follows that Karen and Cynthia Harper's nonspecific ailments prior to 1977, for which medical personnel could opine no cause, cannot be used as the date of discovery of "injury." To do so would defeat the important policies behind the adoption of a discovery rule, and this the Court refuses to do.
IV.
Summary judgment is appropriate only where no genuine issue of material fact exists. New Jersey Life Ins. Co. v. Getz, 622 F.2d 198 (6th Cir.1980). This Court cannot agree with defendant that, taking the facts in the light most favorable to plaintiffs, no genuine issue of material fact exists as to whether plaintiffs' claims accrued prior to November 7, 1977. Accordingly, defendant's motion for summary judgment is denied.
IT IS SO ORDERED.
NOTES
[1] Karen Harper married subsequent to the initiation of this suit. She will be referred to throughout this opinion as either Karen, Karen Harper, or Karen Harper Lundquist.
[2] The syllabus of the O'Stricker court defined accrual in latent disease cases by stating "When an injury does not manifest itself immediately, the cause of action does not arise until the plaintiff knows or, by the exercise of reasonable diligence should have known, that he had been injured by the conduct of defendant, for purposes of the statute of limitations contained in R.C. 2305.10." Under the Ohio syllabus rule, the syllabus, when considered against the fact of the case, states the law of the case. Supreme Court Rules for the Reporting of Opinions, Rule 1(B) (1983). See also Supanick v. Supanick, 66 Ohio St.2d 360, 421 N.E.2d 1301 (1981); Glinsey v. Baltimore & Ohio Ry. Co., 495 F.2d 565, (6th Cir.1974), cert. denied, 419 U.S. 968, 95 S.Ct. 232, 42 L.Ed.2d 184 (1974).
[3] In Raymond, the plaintiff experienced blurriness in 1968 while taking defendant's oral contraceptive. She was then advised to stop taking the drugs as a precaution. She then visited an eye clinic in 1969, where a report on her condition noted the cause as "unknown." In 1970 she read a newspaper article which identified a connection between her condition and side effects of oral contraceptives. Plaintiff did not file her suit, however, until 1975.
In holding that her suit was timely filed under the state's six-year limitations statute, the Supreme Court of New Hampshire described the proper concerns in fashioning a discovery rule in like cases. "In a case, such as the one before us, in which the injury and the discovery of the causal relationship do not occur simultaneously, it is important to articulate exactly what the discovery rule means. We believe that the proper formulation of the rule and the one that will cause the least confusion is the one adopted by the majority of the courts: A cause of action will not accrue under the discovery rule until the plaintiff discovers or in the exercise of reasonable diligence should have discovered not only that he had been injured but also that his injury may have been caused by the defendant's conduct." 370 A.2d at 174.
[4] The Supreme Court of Ohio also recently extended the limitations period in the medical malpractice area. Oliver v. Kaiser Community Health Found, 5 Ohio St.3d 111, 449 N.E.2d 438 (1983). In Oliver, the Court noted that the extension of a discovery rule to the medical malpractice field was consistent with other recent holdings of the Court finding that accrual of a cause of action did not commence until a plaintiff suffered identifiable injury at the hands of the defendant. Kunz v. Buckeye Union Ins. Co., 1 Ohio St.3d 79, 437 N.E.2d 1194 (1982); Velotta v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376, 433 N.E.2d 147 (1982). It is not uncommon for a court to extend discovery rules in different situations as they arise. A definition in one case signifies only the equitable resolution of a discovery rule in a specific factual setting rather than a rule meant to cover all other cases as they may arise. See Dawson v. Eli Lilly and Company, 543 F.Supp. 1330 (D.D.C. 1982).
[5] See also Johnson v. Koppers Co., 524 F.Supp. 1182, 1191 (N.D.Ohio 1981), where the Court, using the Clutter manifestation rule, held that the statute of limitation started to run on the date on which plaintiff's disease was first diagnosed.
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Filed 5/6/15 In re Nevaeh G. CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
In re Nevaeh G., a Person Coming Under
the Juvenile Court Law.
D066746
SAN DIEGO COUNTY HEALTH AND
HUMAN SERVICES AGENCY,
(Super. Ct. No. J517189)
Plaintiff and Respondent,
v.
REBECCA G.,
Defendant and Appellant.
APPEAL from an order of the Superior Court of San Diego County, Michael J.
Martindill, Judge. Affirmed.
Neale B. Gold, under appointment by the Court of Appeal, for Defendant and
Appellant.
Thomas E. Montgomery, County Counsel, John E. Philips, Chief Deputy County
Counsel and Patrice Plattner-Grainger, Deputy County Counsel, for Plaintiff and
Respondent.
Rebecca G. appeals an order under Welfare and Institutions Code1 section 366.26
selecting adoption as the permanent plan for her daughter, Nevaeh G., and terminating
her parental rights. She contends that the court erred in finding that there was not a
beneficial parent-child relationship between her and Nevaeh within the meaning of
section 366.26, subdivision (c)(1)(B)(i) that precluded the termination of her parental
rights. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
In July 2012, the San Diego County Health and Human Services Agency (the
Agency) filed a petition on behalf of then six-year-old Nevaeh under section 300,
subdivision (b) alleging that she was at substantial risk of serious physical harm or illness
because of Rebecca's inability to provide regular care for her due to mental illness,
developmental disability, or substance abuse.2 The petition specifically alleged that
Rebecca had used methamphetamine and alcohol to excess and had been arrested for
being drunk in public on July 13 and July 20, 2012, and that Nevaeh was with her when
1 All statutory references are to the Welfare and Institutions Code unless otherwise
specified.
2 Effective June 20, 2014, subdivision (b) of section 300 was redesignated
subdivision (b)(1). (Stats. 2014, ch. 29, § 64.) Subdivision (b)(1) provides, in relevant
part, that a child comes within the jurisdiction of the juvenile court if "[t]he child has
suffered, or there is a substantial risk that the child will suffer, serious physical harm or
illness as a result of the failure or inability of his or her parent . . . to adequately supervise
or protect the child, . . . or by the willful or negligent failure of the parent . . . to provide
the child with adequate food, clothing, shelter, or medical treatment, or by the inability of
the parent . . . to provide regular care for the child due to the parent's . . . mental illness,
developmental disability, or substance abuse."
2
she was arrested on July 20. The petition further alleged that Rebecca had a history of
substance abuse and had previously participated in two voluntary case plans and a prior
dependency case for Nevaeh.
Officers from the San Diego County Sheriff's Department took Nevaeh into
custody on July 20, 2012 when they responded to a domestic disturbance call involving
Rebecca, who had thrown a bottle at a vehicle after someone in the vehicle called her a
"crack head." The officers observed that Nevaeh was filthy and had severe eczema.
Nevaeh told an officer that she had been walking all day and had eaten only two
doughnuts that day. Rebecca was arrested for being drunk in public and Nevaeh was
taken to Polinsky Children's Center. Rebecca admitted to an Agency social worker who
met with her in jail that she had used methamphetamines and had smoked "spice," a
synthetic form of marijuana, during the week that she was arrested.
The Agency's detention report summarized Rebecca's history with the Agency.
Rebecca participated in voluntary services from February to September 2006 as a result
of Nevaeh's testing positive for marijuana at birth. Rebecca did not test positive for drugs
during the voluntary case, but she failed to follow through with other terms of her case
plan. Another voluntary case was opened in October 2007 after Rebecca and the
maternal grandmother engaged in a physical altercation that led to Rebecca's arrest.
Rebecca completed a 90-day residential substance abuse program in that case, but failed
to participate in outpatient substance abuse treatment or therapy, as she had agreed to do
in her voluntary case plan.
3
The Agency took Nevaeh into protective custody and initiated a dependency case
on her behalf in July 2008 due to general neglect after police found her with her maternal
grandmother in the grandmother's bedroom during a search of the home, and found that
the grandmother was in possession of methamphetamine. During the dependency case,
Rebecca participated in therapy, home parenting services, and outpatient substance abuse
treatment. The court terminated jurisdiction in that case in September 2010.
The Agency social worker spoke with Rebecca's first cousin, Valerie C., who said
that she and Rebecca considered themselves sisters. Valerie went to Rebecca's home in
December 2011 to pick up Nevaeh because Rebecca was not feeding or caring for
Nevaeh. Valerie expressed concern about Nevaeh and said that Rebecca mentally and
physically abused Nevaeh. Valerie cared for Nevaeh for a couple of months. She told
the social worker that Rebecca had been using drugs since she was a teenager and that
she had an alcohol problem that had recently increased. She thought Rebecca might need
a mental health evaluation because she would "say random things."
The Agency reported in its jurisdiction/disposition report that Nevaeh was
detained with Wendy T., a nonrelative extended family member (NREFM).3 Rebecca
told an Agency social worker that she had asked her aunt, Donna D., and Wendy T. to
"come and get" Nevaeh because "she's being bad. I can't take care of her." Rebecca
wanted Wendy to have legal guardianship over Nevaeh. She stated, "My kid is bad. She
3 Section 362.7 provides that "[a] 'nonrelative extended family member' is defined
as an adult caregiver who has an established familial relationship with a relative of the
child . . . or a familial or mentoring relationship with the child."
4
needs her ass whooped and you guys won't let me do it." Wendy and Donna both
expressed concern about Rebecca's mental health and her ability to consistently care for
Nevaeh. Rebecca told the social worker that she thought she had a mental health
problem, but she did not know what it was. She was happy with Nevaeh's placement
with Wendy. She said that it was what she had wanted "for a long time," and that she had
been trying to arrange it before the Agency got involved.
Nevaeh told the social worker that she called Wendy "Nana," and that she liked
living at Nana's house because Nana took care of her. When asked what taking care of
her meant, Nevaeh said that Nana fed her, bathed her, and helped her go to bed at night.
At the jurisdiction hearing, the court sustained the petition and made a true finding
on the count under section 300, subdivision (b) by clear and convincing evidence. At a
later disposition hearing, the court declared Nevaeh a dependent of the court, and
removed her from Rebecca's custody. The court placed Nevaeh with an approved
NREFM and ordered Rebecca to comply with reunification services.
The Agency's report for the six-month review hearing noted that Nevaeh remained
placed with Wendy and that she reported feeling safe and loved in "Nana's" home.
Wendy had been diligently attending to Nevaeh's medical and emotional needs.
Rebecca called the social worker in early September 2012 and reported that she
was at the Isis House Crisis Center for the severely mentally ill. She had called a crisis
line and was taken to a hospital where she was kept overnight before being released to
Isis House. The hospital assessed her as presenting with depression and suicidal ideation.
5
Rebecca left Isis House on September 12, 2012. The next day, San Diego police officers
took her to the San Diego County Psychiatric Hospital from the Jane Westin Center,
where staff reported that she had been irritable and that there were concerns that she
might pose a danger to others. She was discharged from the county hospital on
September 20, 2012.
On October 10, 2012, Rebecca called the social worker from the Las Colinas
Detention Center and reported that she had been arrested following a violent altercation
with her ex-girlfriend, Janice K., after she (Rebecca) drank an entire 750 milliliter bottle
of rum. Janice told the police that Rebecca had bitten her on the right forearm and would
not let go. As a result, Janice suffered a laceration on her forearm that was approximately
four inches long and two inches wide. Rebecca was arrested for mayhem and battery
with serious bodily injury, but the district attorney's office declined to prosecute the case.
Wendy informed the social worker on October 19, 2012 that Rebecca had entered
the "CRASH" program.4 A staff member of the program named Robin told the social
worker that Rebecca had admitted to smoking spice and using methamphetamine and
alcohol days before her admission. Robin reported that Rebecca was "really out of it."
She was making odd comments, not doing well with the other residents, and not
following rules. Robin expressed concern that Rebecca might be in a drug-induced
4 The Agency states in its responding brief that CRASH is an acronym for
Community Resources and Self Help.
6
psychosis. Approximately 20 minutes after the social worker's conversation with Robin,
Robin called the social worker back to report that Rebecca had left the program.
Rebecca was readmitted to the county mental health facility on October 20, 2012
and was discharged on October 22. Medical records from her inpatient stay revealed that
police took her there after they found her trespassing on private property in a psychotic
state. She tested positive for "THC and benzos" and admitted to having used
methamphetamine a few days earlier. At the time she was discharged, she was diagnosed
as having a drug induced psychotic disorder with delusions, mood disorder, and
dependence on alcohol, amphetamine, and cannabis.
On October 25, Rebecca entered a Christian faith-based, residential recovery
program called Cornerstone Restoration Ranch (Cornerstone). On November 7, the
director of Cornerstone told the social worker that Rebecca was "not in reality most of the
time," and that Rebecca heard voices and asked if they were real. Rebecca was
prescribed medications to treat psychosis, anxiety, and insomnia. On November 14, the
director of Cornerstone reported that Rebecca was doing much better. As of the end of
November, Rebecca was undergoing therapy and was consistently taking her prescribed
medications. In January 2013 she tested negative for all substances screened in a drug
test that the social worker requested.
In August 2012, the social worker completed the "Three Houses" exercise with
Nevaeh, in which Nevaeh drew a "House of Good Things," a "House of Worries," and a
7
"House of Wishes." Nevaeh also added a "House of Sad."5 Nevaeh's House of Good
Things included her caregiver, a family friend, and the social worker. Her House of
Worries and House of Sad included boys who made fun of her at school and a sad face of
herself. In her House of Wishes she listed more friends, to be a fairy, a magical unicorn,
and "a mom that doesn't threaten me," and drew a picture of herself smiling. Nevaeh had
consistently told the social worker that she loved her mother and wanted more visits with
her.
At the six-month review hearing, the court found that Rebecca had made
substantive progress with her case plan and ordered the Agency to continue to provide
her services. The court continued Nevaeh's NREFM placement.
The Agency's report for the 12-month review hearing filed on August 9, 2013
stated that Nevaeh had been on a 60-day trial visit with Rebecca since June 30, 2013.
When the trial visit began, Rebecca was in the residential Cornerstone program. Rebecca
left Cornerstone in July and on August 6, she and Nevaeh moved into a sober living
facility through the McAlister Institute SAFE Housing Program. During that transition
period, Rebecca consistently checked in with the Agency and showed that she was caring
for Nevaeh's needs.
The Agency reported that Nevaeh's mental and emotional status had dramatically
improved since the six-month review hearing. Nevaeh became immediately happier and
5 The social worker explained that the Three Houses exercises "is meant to elicit the
voice of the child and [her] perceptions of what is working well in [her] life, what [she] is
concerned about, and what [she hopes] will happen next."
8
her tantrums "practically ceased" after she began having unsupervised and overnight
visits with Rebecca. In addition, enuresis and encopresis that Nevaeh had been
experiencing lessened dramatically after she began to spend more time with Rebecca.
Rebecca tested negative for substance abuse after she left Cornerstone, and she had been
consistently participating in therapy.
At the 12-month review hearing on August 21, 2013, the court continued Nevaeh
as a dependent of the court, but placed her with Rebecca. The court set a review hearing
for February 18, 2014.
On January 7, 2014, El Cajon police responded to a call reporting that a woman
(Rebecca) was striking a child and a second call from Rebecca reporting that a woman
(the first caller) was following her in a vehicle. Nevaeh told the police that Rebecca had
hit her on the arm and pushed her down when she refused to let go of a discarded
Christmas tree that she wanted to take home. Rebecca had to forcibly pull Nevaeh away
from the tree. After the incident, Nevaeh told a social worker that she felt safe with
Rebecca and wanted to go home with her.
During an unannounced home visit on January 21, 2014, Rebecca was cheerful
and engaging and told the social worker that she was doing better than she had been at
the time of the incident on January 7, and was addressing with her therapist issues
regarding disciplining Nevaeh and dealing with the loss of her mother.6 Rebecca's
therapist reported that Rebecca was doing well in therapy and had made great progress in
6 Rebecca's mother had died the week before the January 7 incident.
9
controlling her anger. Nevaeh's mental and emotional status had continued to improve.
She consistently told the social worker that she was happy and that she felt safe with her
mother and wanted to live with her mother. The Agency recommended that the court
place Nevaeh with Rebecca and terminate jurisdiction over her.
On February 27, 2014, the Agency filed a section 387 petition alleging that
Nevaeh's placement with Rebecca had "not been effective in the protection or
rehabilitation of the child." The petition alleged that from January 7, 2014 to the present,
Rebecca had hit Nevaeh on several occasions and had threatened to physically harm her.
Nevaeh had reported being hungry and having little or nothing to eat. On February 4,
Nevaeh was prescribed an antibiotic for a urinary tract infection, but Rebecca had not
picked up the prescription despite numerous attempts by the doctor's office to contact her.
A relative picked up the antibiotics 10 days later. On February 24, Rebecca was
hospitalized under section 5150 because she attacked a roommate. Rebecca had stopped
attending meetings and drug testing at her sober living facility, and Nevaeh had reported
feeling unsafe in Rebecca's care.
The Agency reported that it had received a referral stating that Rebecca and
Nevaeh were living in a sober living facility for women and children, and Rebecca
regularly got into arguments with other women at the facility. Rebecca had screamed,
yelled, and cussed at the other women in front of Nevaeh, and stated, "If I had a fucking
gun I would shoot up everyone in here." She had stopped participating in the program's
meetings and drug testing. On February 24, she punched her roommate in the face, in
10
front of Nevaeh, when the roommate came out of the shower. Rebecca reported that her
sister, who was not present, told her to do it. Rebecca then took Nevaeh into another unit
where she (Rebecca) cornered a woman and appeared to be about to hit the woman when
staff intervened. Police transported Rebecca to the hospital to be assessed.
The Agency filed a detention report stating that Nevaeh was detained with
NREFMs Travis and Danielle H. The Agency reported that Nevaeh had witnessed all of
Rebecca's irrational behavior and was "forced to make adult decisions all of the time."
Nevaeh administered her own medications and breathing treatments for her asthma
because Rebecca failed to do it. Nevaeh was constantly trying to explain and excuse
Rebecca's behavior, telling people that Rebecca had been abused as a child and that was
why she acted the way she did.
Nevaeh told the social worker on February 25, 2014 that Rebecca had hit her with
a closed fist between the eyes and it hurt "really bad." She said that Rebecca had been
hitting her all her life, but mostly on the butt. She told the social worker that she did not
feel safe with Rebecca and did not want to go back to Rebecca. She raised her voice and
added, "and you can tell anyone that." The Agency recommended that visitation between
Rebecca and Nevaeh be supervised.
The Agency filed a jurisdiction/disposition report on March 19, 2014. The
Agency reported that it had received a hotline referral on March 4 stating that Nevaeh
had told her caregiver that someone had touched her "down there," and that it hurt, but
she would not reveal who had done it. The Agency received another referral on March 5
11
stating that Rebecca had put her tongue on Nevaeh's private parts when Nevaeh was two
years old and was sleeping. Rebecca told the reporting person that she felt very guilty
about having done it, and that she did it to determine if anyone had abused Nevaeh. She
explained that once she touched her tongue to Nevaeh's "privates," she would be able to
tell if anyone had done that before. The next day Rebecca told the social worker that she
had never licked, touched, or inserted anything into Nevaeh's vagina at age two or any
other age, and that voices told her to say that she had licked Nevaeh's vagina. The voices
told her that if she did not say it, she would have to do it.
Rebecca later told the social worker that all of her problems started when she
stopped taking her medication in late October or early November, 2013. She could not
recall what medication she had been taking, but she remembered that it helped her
function day to day and that she did not hear voices while she was taking it. When the
social worker asked her why she stopped taking the medication, she said, "I don't know, I
just did not reorder." Rebecca's psychiatrist diagnosed her as having a psychotic disorder
and being borderline bipolar. He prescribed her a medication to address the psychotic
disorder and reduce her episodes of hearing voices. The Agency concluded that
Rebecca's inability "to follow up on" Nevaeh's basic needs placed Nevaeh's health at risk.
At a jurisdiction hearing on March 25, 2014, the court made a true finding on the
section 387 petition, removed Nevaeh from Rebecca's custody, and placed her with a
NREFM. The court terminated Rebecca's reunification services and set a section 366.26
hearing.
12
The Agency's report for the section 366.26 hearing, prepared by social worker
Crystal Irving, stated that Nevaeh was placed in a confidential NREFM's home where she
had resided since February 25, 2014. Nevaeh presented as a "happy child with a dazzling
personality." She consistently reported that she liked living with her current caregivers
because she always felt safe and well cared for by them. She became visibly upset when
she talked and thought about the trauma she experienced when she was a victim of sexual
abuse.
Visits between Rebecca and Nevaeh had been supervised by the current
confidential caregiver, who was advised to cancel a visit if Rebecca appeared to be under
the influence of drugs or alcohol. Rebecca agreed to reschedule a visit if she was hearing
voices, and she cancelled a visit in early March for that reason.
Social worker Irving supervised a visit between Nevaeh and Rebecca on May 2,
2014. Nevaeh said that she missed her mother because she was "like her big teddy bear."
The visit went well and Nevaeh said that she "felt loved." When it was time for the visit
to end, Nevaeh continued to hug Rebecca. The visit ended pleasantly and "Nevaeh
walked to the car with a smile." Irving reported that "[t]here was no emotional display of
sadness due to the visit ending." A visit on May 8 also went well. Irving reported that
"Nevaeh appeared to be happy to have had a visit with her mother, as indicated by her
smiling and hugging her mother." Irving again reported that Nevaeh displayed no
emotion when Rebecca left.
13
Irving supervised a visit on May 25, 2014 at the drug and alcohol treatment
facility where Rebecca was residing. Nevaeh sang, "mommy mommy mommy" as she
and Irving approached the facility, and she was happy to see Rebecca. Rebecca and
Nevaeh made Fourth of July lanterns together and then played together on playground
equipment. Nevaeh jumped into Rebecca's arms and talked about school. Irving reported
that when the visit ended, Nevaeh separated from Rebecca with ease and displayed no
emotion.
Irving reported that Nevaeh's caregivers were married and had a son together, and
were emotionally and financially secure. The female caregiver had known Nevaeh's
family for over 30 years. She had watched Nevaeh grow and developed a strong bond
with her over the years. She and her husband wanted to adopt Nevaeh to offer her the
stability, safety, and permanency that Nevaeh needed. Nevaeh stated that if she could
choose with whom she could live, she would choose her current caregivers. She said that
she "always has food" and enjoyed having her own room, and that she felt "the safest
with [her caregivers]" and never got hit.
Irving's assessment was that although Nevaeh loved and had an affectionate
relationship with Rebecca, Rebecca had not shown that she played a parental role in
Nevaeh's life. Nevaeh referred to Rebecca as "mommy" but, in Irving's view, "the
relationship models that of a sibling relationship. They talk, laugh, and appear to enjoy
each other's company, but there is no parenting demonstrated. Nevaeh looks to her
current caregiver to get her needs met. [Rebecca] even looks to the current caregiver to
14
make decisions regarding Nevaeh, as indicated by her asking if Nevaeh can have a piece
of candy." The Agency recommended that the court terminate parental rights and order a
permanent plan of adoption for Nevaeh.
Rebecca filed a section 388 petition on July 23, 2014, requesting that the court
change its order terminating her reunification services and setting the section 366.26
hearing, and enter a new order placing Nevaeh with her and either closing the case or
providing further reunification services. As changed circumstances, Rebecca alleged that
the allegations that she had sexually abused Neveah and neglected her by delaying
medical treatment had been closed as inconclusive. Rebecca further alleged that she had
entered KIVA (a drug and alcohol treatment program), all of her drug tests during her
participation in the program had been negative, she continued to attend Alcoholics
Anonymous and Narcotics Anonymous meetings and therapy, and she had completed an
anger management class.
Irving filed an addendum report stating that the Agency opposed Rebecca's section
388 petition and continued to recommend termination of parental rights and adoption as
Nevaeh's permanent plan. Irving noted that Rebecca had a long history of substance
abuse that could not "be easily removed or ameliorated," and that Rebecca was "in the
initial stage of recovery and is 'in progress' of addressing her substance abuse issues."
Irving stated that the Agency commended Rebecca "for the progress she has made in
treatment, however, she has not demonstrated to a significant degree that she has
15
alleviated the risks that led to Nevaeh's removal." Irving reiterated her assessment that
Rebecca had not played a parental role in Nevaeh's life.
Irving reported that Nevaeh's needs were appropriately and consistently being met
in her current placement, and that Nevaeh had conveyed that she wanted to remain in her
current placement because that was where she felt the safest. Nevaeh's caregiver called
Irving on July 24, 2014 and stated that Nevaeh had told her that she did not want
overnight visits with Rebecca because she did not "have [her caregiver's] phone number
to call if something happened." Nevaeh told her caregiver that she did not want Rebecca
to know where she lived because she was afraid that Rebecca would "come and beat her
up in the middle of the night." She said that she was not currently afraid of Rebecca
because the caregiver was always with her.
Nevaeh also told her caregiver that one night at her grandmother's home, Rebecca
told her that she (Rebecca) wanted a boyfriend. Rebecca then proceeded to show Nevaeh
what she wanted the boyfriend to do to her (Rebecca) by showing Nevaeh "nasty videos
and . . . touching her private parts and sticking her fingers in it." The caregiver asked
Nevaeh if Rebecca had ever touched her like that. Nevaeh said "no," Rebecca only
touched herself. Nevaeh added that "Robert did that sometimes."7 Rebecca later took
her medication and told Nevaeh that she (Rebecca) "should not have done that." When
Irving asked Rebecca if she had touched her vagina in Nevaeh's presence or had ever
7 Irving had Nevaeh draw a "Safety/Permanency House" that included a list of
people who were not allowed in the house. On that list, Nevaeh identified "Robert" as
"her's [sic] nona's son."
16
shown Nevaeh "nasty videos," Rebecca said she did "not recall." Rebecca told Irving
that she believed that Nevaeh had fabricated those allegations because "Nevaeh never felt
safe with [her], so she made it up so that she wouldn't have to [come] back with [her]."
The court denied Rebecca's section 388 petition on July 29, 2014, and held a
contested section 366.26 hearing on September 25. The court received the Agency's
reports in evidence and heard testimony from Irving and Rebecca. After hearing
argument on the section 366.26 issues, the court found by clear and convincing evidence
that Nevaeh was likely to be adopted and that none of the circumstances specified in
section 366.26, subdivision (c)(1)(B) that would make termination of parental rights
detrimental to Nevaeh existed. In its oral ruling, the court stated that it found "by the
evidence presented that the relationship [between Rebecca and Nevaeh] is more of a
friendly familial relationship, and it does not rise to the level of a parent[-]child bond that
would outweigh the benefits of a permanent home." The court terminated parental rights
and referred Nevaeh to the Agency for adoptive placement.
DISCUSSION
Rebecca contends that the court erred in finding that the beneficial parent-child
relationship exception of section 366.26, subdivision (c)(1)(B)(i), did not apply to
preclude the termination of her parental rights. " 'At a permanency plan hearing, the
court may order one of three alternatives: adoption, guardianship or long-term foster care.
[Citation.] If the dependent child is adoptable, there is a strong preference for adoption
over the alternative permanency plans.' [Citation.] 'Once the court determines the child
17
is likely to be adopted, the burden shifts to the parent to show that termination of parental
rights would be detrimental to the child under one of the exceptions listed in section
366.26, subdivision (c)(1). [Citations.] Section 366.26, subdivision (c)(1)(B)(i),
provides an exception to termination of parental rights when "[t]he parents have
maintained regular visitation and contact with the child and the child would benefit from
continuing the relationship." ' " (In re G.B. (2014) 227 Cal.App.4th 1147, 1165.)
This court has interpreted "the 'benefit from continuing the parent[-]child
relationship' exception to mean the relationship promotes the well-being of the child to
such a degree as to outweigh the well-being the child would gain in a permanent home
with new, adoptive parents. In other words, the court balances the strength and quality of
the natural parent[-]child relationship in a tenuous placement against the security and the
sense of belonging a new family would confer. If severing the natural parent[-]child
relationship would deprive the child of a substantial, positive emotional attachment such
that the child would be greatly harmed, the preference for adoption is overcome and the
natural parent's rights are not terminated." (In re Autumn H. (1994) 27 Cal.App.4th 567,
575.)
"A parent asserting the parental benefit exception has the burden of establishing
that exception by a preponderance of the evidence. [Citation.] It is not enough to show
that the parent and child have a friendly and loving relationship. [Citation.] ' "Interaction
between [a] natural parent and child will always confer some incidental benefit to the
child. . . ." ' [Citation.] For the exception to apply, 'a parental relationship is
18
necessary[.]' [Citation.] ' "While friendships are important, a child needs at least one
parent. Where a biological parent . . . is incapable of functioning in that role, the child
should be given every opportunity to bond with an individual who will assume the role of
a parent. " ' " (In re J.C. (2014) 226 Cal.App.4th 503, 529.)
We apply the substantial evidence standard of review to the factual issue of
whether there is a beneficial parent-child relationship, and the abuse of discretion
standard to the determination of whether there is a compelling reason for finding that
termination of parental rights would be detrimental to the child. (In re J.C., supra, 226
Cal.App.4th at pp. 530-531; In re K.P. (2012) 203 Cal.App.4th 614, 621-622; In re
Bailey J. (2010) 189 Cal.App.4th 1308, 1314-1315.) The latter determination "calls for
the juvenile court to determine the importance of the relationship in terms of the
detrimental impact that its severance can be expected to have on the child and to weigh
that against the benefit to the child of adoption . . . ." (In re J.C., supra, at p. 531.)
In applying the substantial evidence standard of review, we do not consider the
credibility of witnesses, attempt to resolve conflicts in the evidence or weigh the
evidence. Instead, we draw all reasonable inferences in support of the findings, view the
record favorably to the juvenile court's order and affirm the order even if there is
substantial evidence supporting a contrary finding. (In re Baby Boy L. (1994) 24
Cal.App.4th 596, 610; Amanda H. v. Superior Court (2008) 166 Cal.App.4th 1340,
1346.) On appeal, the parent has the burden of showing that there is no evidence of a
19
sufficiently substantial nature to support the court's finding or order. (In re L.Y.L. (2002)
101 Cal.App.4th 942, 947.)
We conclude that Rebecca has not met her burden of establishing that the
beneficial relationship exception to adoption applies. The evidence sufficiently supports
the court's finding that Rebecca's relationship with Nevaeh did "not rise to the level of a
parent[-]child bond that would outweigh the benefits of a permanent home." Irving's
assessment was that Nevaeh loved Rebecca and that their relationship was affectionate,
but Rebecca had not shown that she played a parental role in Nevaeh's life. Irving stated
that "the relationship models that of a sibling relationship. They talk, laugh, and appear
to enjoy each other's company, but there is no parenting demonstrated." The court was
entitled to find Irving's opinion credible and to give great weight to her assessment. (In
re Casey D. (1999) 70 Cal.App.4th 38, 53.)
As noted, to overcome the preference for adoption and preclude termination of
parental rights at a permanency plan hearing, the evidence must support a finding that
"severing the natural parent[-]child relationship would deprive the child of a substantial,
positive emotional attachment such that the child would be greatly harmed . . . ." (In re
Autumn H., supra, 27 Cal.App.4th at p. 575, italics added.) Even assuming that the
evidence shows the existence of a parent-child relationship between Rebecca and Nevaeh
that provided some benefit to Nevaeh, we conclude that the court could reasonably find
that severing the relationship would not cause Nevaeh to be greatly harmed.
20
Throughout the dependency proceedings, Nevaeh repeatedly focused on her own
safety, frequently stating that she felt unsafe with Rebecca and that she felt safe in her
NREFM placements, and that her needs were met in those placements. Nevaeh reported
feeling safe and loved in Wendy's home. After Rebecca was hospitalized under section
5150 in February 2014 because she attacked a roommate, Nevaeh told a social worker
that she did not feel safe in Rebecca's care. She consistently reported that she liked living
with her current caregivers because she always felt safe and well cared for. She did not
want overnight visits with Rebecca because she did not "have [her caregiver's] phone
number to call if something happened." She told her caregiver that she did not want
Rebecca to know where she lived because she was afraid that Rebecca would "come and
beat her up in the middle of the night." She said that she was not currently afraid of
Rebecca because the caregiver was always with her. Rebecca herself admitted to Irving
that Nevaeh "never felt safe with [her]," and that she believed that Nevaeh fabricated
allegations that she (Rebecca) had engaged in inappropriate sexual conduct because
Nevaeh did not want to be returned to her custody.
At the section 366.26 hearing, Irving testified that her opinion about the
relationship between Rebecca and Nevaeh was affected by reports that Nevaeh had
"nightmares that her mother would come in and beat her up in the middle of the night"
and that Nevaeh had sometimes "soiled herself due to her fears regarding the relationship
with her mother." Irving testified that recent anxiety Nevaeh had been exhibiting was
"directly related to [Nevaeh's] fear of being placed with her mother." Irving further
21
testified that Nevaeh was "very concerned about not wanting to hurt her mother's
feelings . . . ." Irving believed that Nevaeh "want[ed] to see her mom as a friendly
visitor, because she's stated that she doesn't want to be in her care full time and have that
maternal type of relationship."
Nevaeh stated that if she could choose with whom she could live, she would
choose her current caregivers. She said that she "always has food" and enjoyed having
her own room, and that she felt safest with her caregivers and never gets hit. Nevaeh had
asked her current caregivers if she could call them mom and dad, and had asked that her
last name be changed to their last name. Irving believed "that even if [Nevaeh] becomes
sad around the fact that visits [with Rebecca] are being discontinued, in the long run in
will definitely benefit her to be adopted by her caregivers." The evidence in the record
amply supports a finding that severance of Nevaeh's parent-child relationship with
Rebecca would not cause Nevaeh to be greatly harmed, even if Rebecca occupied a
parental role in Nevaeh's life. Accordingly, substantial evidence supports the court's
finding that there was not a parent-child relationship between Rebecca and Nevaeh that
would outweigh the benefits of adoption.
22
DISPOSITION
The order terminating parental rights and selecting adoption as the permanent plan
for Nevaeh is affirmed.
AARON, J.
WE CONCUR:
HUFFMAN, Acting P. J.
McDONALD, J.
23
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December 10, 2013
JUDGMENT
The Fourteenth Court of Appeals
ROBERT LEE KEGLER, Appellant
NO. 14-13-00254-CR V.
THE STATE OF TEXAS, Appellee
________________________________
This cause was heard on the transcripts of the record of the court below, and
having inspected the record, the Court holds there was no error in the judgment
requiring reversal, but there was error in the judgment as entered, which is capable
of reformation by this Court. Therefore, the judgment is MODIFIED, to delete the
specific dollar amount of costs and attorney’s fees.
The Court orders the judgment AFFIRMED as MODIFIED.
We further order this decision certified below for observance.
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 16-1389V
Filed: July 7, 2017
UNPUBLISHED
RITU BHATIA-NUNEZ,
Special Processing Unit (SPU);
Petitioner, Attorneys’ Fees and Costs
v.
SECRETARY OF HEALTH AND
HUMAN SERVICES,
Respondent.
Alison H. Haskins, Maglio Christopher & Toale, PA, Sarasota, FL, for petitioner.
Daniel Anthony Principato, U.S. Department of Justice, Washington, DC, for
respondent.
DECISION ON ATTORNEYS’ FEES AND COSTS1
Dorsey, Chief Special Master:
On October 25, 2016, petitioner filed a petition for compensation under the
National Vaccine Injury Compensation Program, 42 U.S.C. §300aa-10, et seq.,2 (the
“Vaccine Act”). Petitioner alleged that she suffered from Guillain-Barre Syndrome
following an influenza vaccination. On May 11, 2017, the undersigned issued a
decision awarding compensation to petitioner based on the parties’ stipulation. (ECF
No. 20.)
1
Because this unpublished decision contains a reasoned explanation for the action in this case, the
undersigned intends to post it on the United States Court of Federal Claims' website, in accordance with
the E-Government Act of 2002. 44 U.S.C. § 3501 note (2012) (Federal Management and Promotion of
Electronic Government Services). In accordance with Vaccine Rule 18(b), petitioner has 14 days to
identify and move to redact medical or other information, the disclosure of which would constitute an
unwarranted invasion of privacy. If, upon review, the undersigned agrees that the identified material fits
within this definition, the undersigned will redact such material from public access.
2
National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755. Hereinafter, for
ease of citation, all “§” references to the Vaccine Act will be to the pertinent subparagraph of 42 U.S.C. §
300aa (2012).
On June 23, 2017, petitioner filed an unopposed motion for attorneys’ fees and
costs. (ECF No. 24.)3 Petitioner requests attorneys’ fees in the amount of $16,306.00
and attorneys’ costs in the amount of $817.19. (Id. at 1.) In compliance with General
Order #9, petitioner filed a signed statement indicating that petitioner incurred no out-of-
pocket expenses. Thus, the total amount requested is $17,123.19.
The Vaccine Act permits an award of reasonable attorneys’ fees and costs.
§ 15(e). Based on the reasonableness of petitioner’s request and the lack of opposition
from respondent, the undersigned GRANTS petitioner’s motion for attorneys’ fees and
costs.
Accordingly, the undersigned awards the total of $17,123.194 as a lump
sum in the form of a check jointly payable to petitioner and petitioner’s counsel
Alison H. Haskins.
The clerk of the court shall enter judgment in accordance herewith.5
IT IS SO ORDERED.
s/Nora Beth Dorsey
Nora Beth Dorsey
Chief Special Master
3
The motion was filed as an unopposed motion and specifically states that respondent has no objection
to the overall amount sought. The motion states that respondent’s lack of objection to the amount sought
in this case should not be construed as an admission, concession, or waiver as to the hourly rates
requested, the number of hours billed, or the other litigation related costs. (ECF No. 24 at 2.)
4
This amount is intended to cover all legal expenses incurred in this matter. This award encompasses all
charges by the attorney against a client, “advanced costs” as well as fees for legal services rendered.
Furthermore, § 15(e)(3) prevents an attorney from charging or collecting fees (including costs) that would
be in addition to the amount awarded herein. See generally Beck v. Sec’y of Health & Human Servs.,
924 F.2d 1029 (Fed. Cir.1991).
5
Pursuant to Vaccine Rule 11(a), entry of judgment can be expedited by the parties’ joint filing of notice
renouncing the right to seek review.
2
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757 F.2d 211
55 A.F.T.R.2d 85-1101, 85-1 USTC P 9279
UNITED STATES of America, Appellee,v.Robert Eugene PARSHALL, Appellant.
No. 84-1282.
United States Court of Appeals,Eighth Circuit.
Submitted Oct. 8, 1984.Decided March 19, 1985.Rehearing and Rehearing En Banc Denied April 24, 1985.
Robert L. Fanter, Des Moines, Iowa, for appellant.
Guy R. Cook, Asst. U.S. Atty., Des Moines, Iowa, for appellee.
Before LAY, Chief Judge, ROSS and McMILLIAN, Circuit Judges.
McMILLIAN, Circuit Judge.
1
Robert Eugene Parshall appeals from a final judgment entered in the District Court1 for the Southern District of Iowa upon a jury verdict finding him guilty of two counts of willful failure to file federal income tax returns for tax years 1979 and 1980 in violation of 26 U.S.C. Sec. 7203. The district court sentenced appellant to one year in prison, to be released as if on parole after service of one-third of the term pursuant to 18 U.S.C. Sec. 4205(f), a fine of $5,000, and three years probation and taxed the costs of prosecution ($1,536.89) against him. For reversal appellant argues that the district court erred in (1) excluding evidence of substantially lower tax liability and testimony about the tax treatment of assignment of income by persons who have taken vows of poverty and are associated with religious orders, (2) giving instruction No. 14 to the jury and (3) denying his motion for judgment of acquittal on the ground that 26 U.S.C. Sec. 7203 is unconstitutionally vague. For the reasons discussed below, we affirm the judgment of the district court.
2
The government showed that although appellant was employed as a second officer by United Air Lines during the years 1977 through 1980 and had received income in excess of $40,000 annually from 1977 through 1979 and in excess of $59,000 in 1980, appellant did not file any federal income tax returns for those years and had paid no federal income taxes for those years. Appellant explained his failure to file federal income tax returns as a consequence of his having taken a vow of poverty and his membership in the Parshall Christian Order, a church that he founded in 1975 as an integrated auxiliary of the Miletus Church. Appellant claimed that he was exempt from filing federal income tax returns because he was a member of the Miletus Church and the Parshall Christian Order.
3
The government also presented evidence that appellant had sought the advice of a tax consultant in the early 1970s about the tax consequences of a vow of poverty, that appellant had filed federal income tax returns in 1975 and 1976 claiming that he was the chief steward of the Parshall Christian Order and as such was exempt from federal income tax, that in August 1976 and December 1976 United Air Lines had informed appellant that his wages were subject to federal income tax withholding, that in October 1976 the Internal Revenue Service (IRS) had reviewed appellant's 1975 federal income tax return and had determined that his wages were taxable as income to him and not the Parshall Christian Order, and that in April 1979 the IRS had informed appellant that a second audit of his 1975 return and a first audit of his 1976 return indicated that his wages were taxable to him and that the creation of the Parshall Christian Order and his assignment of funds and income to it "constituted a sham transaction not recognized for federal income tax purposes."
4
The jury found appellant guilty of willful failure to file federal income tax returns for the years 1979 and 1980. This appeal followed.
5
Appellant first argues that the district court erred in excluding evidence of substantially lower tax liability and expert testimony about the tax treatment of assignment of income by persons who have taken vows of poverty and are associated with religious orders. The government as part of its case-in-chief introduced evidence that appellant faced a substantial tax liability of about $30,369 as circumstantial evidence of willfulness. In order to rebut this evidence, appellant sought to introduce evidence that his tax liability was much lower. Appellant made an offer of proof that an independent tax preparer and former IRS agent had calculated that appellant's tax liability for the years 1977 through 1980 was about $3,660 and that appellant was due about $14,379 in refunds for the years 1981 and 1982. Appellant also sought to introduce evidence from a tax attorney and accountant that the tax consequences of an assignment of income to a church or religious order by a vow of poverty were uncertain until 1981.
6
We hold that the district court abused its discretion in excluding the proffered evidence of substantially lower tax liability. Willfulness is an element of the offense of willful failure to file income tax returns. "In a case such as this where the element of willfulness is critical to the defense, the defendant is entitled to wide latitude in the introduction of evidence tending to show lack of intent." United States v. Garber, 607 F.2d 92, 99 (5th Cir.1979) (banc) (conviction for knowingly misstating income under 26 U.S.C. Sec. 7201). Here, the government introduced evidence that appellant owed a substantial amount in taxes in order to show appellant's failure to file income tax returns was willful. Appellant permissibly sought to rebut this inference of willfulness by showing that his tax liability was much less than the government's estimate and that in fact the government owed him tax refunds.
7
We also hold that the district court abused its discretion in excluding evidence about the allegedly uncertain state of the law involving assignment of income to religious orders or churches. "When the taxability of unreported income is problematical as a matter of law, the unresolved nature of the law is relevant to show that [the] defendant may not have been aware of a tax liability or may have simply made an error in judgment." Id. at 98 (tax treatment of earnings from sale of rare blood plasma); see United States v. Critzer, 498 F.2d 1160, 1162 (4th Cir.1974) (tax treatment of income derived from lands held by the United States in trust for the Eastern Cherokee Band). In the absence of a determination that appellant's position was frivolous or did not involve a disputed tax question, the district court should not have excluded the proffered evidence.
8
We conclude, however, that these evidentiary errors were harmless under the circumstances and are not grounds for reversal. First, whether appellant faced a substantial or relatively insubstantial tax liability and whether the state of the law about assignment of income to churches or religious orders was uncertain were only marginally relevant to the theory of government's case and the defense. The present case involved prosecution for completely failing to file income tax returns, not for failing to report disputed amounts as income. Thus, the central issue was whether appellant should have filed income tax returns but willfully failed to do so. The present case turned upon the proper characterization of appellant's relationship with the Parshall Christian Order. The government's theory was that appellant's assignment of income to the Parshall Christian Order by a vow of poverty was a sham transaction engineered to avoid filing income tax returns. Appellant's theory was that his vow of poverty was an extension of his religious beliefs. The instructions given by the district court cautioned the jury that the government's evidence of tax liability was not to be considered as evidence of the actual amount of tax due and that the fact that appellant may owe taxes was relevant only to the issue of willfulness.
9
Second, we have carefully reviewed the record and conclude that there was overwhelming evidence establishing that appellant willfully failed to file income tax returns.
10
Appellant next argues that the district court erred in giving instruction No. 14 to the jury. The second paragraph of the proposed instruction contained the following phrase: "[d]isagreement with the law or government policies does not constitute good faith misunderstanding of the requirements of the law." Appellant objected to the words "government policies." The district court suggested that the words "the way in which tax revenues are spent" be substituted and then offered appellant a choice between the two suggested phrases. Appellant, however, objected to the substitute language on the grounds that, like the words "government policies," it was vague, susceptible to misinterpretation by the jury, suggested that political or social disagreement with government policies was evidence of bad faith, and improperly emphasized particular evidence. The district court included the following language as part of instruction No. 14: "Disagreement with the law or the way in which tax revenues are spent, however, does not constitute good faith misunderstanding of the requirements of the law." Appellant argues that the district court should have simply instructed the jury that "disagreement with the law is not a defense," citing United States v. Pohlman, 522 F.2d 974, 976-77 (8th Cir.1975) (banc), cert. denied, 423 U.S. 1049, 96 S.Ct. 776, 46 L.Ed.2d 638 (1976), and United States v. Karsky, 610 F.2d 548, 550 (8th Cir.1979) (per curiam), cert. denied, 444 U.S. 1092, 100 S.Ct. 1058, 62 L.Ed.2d 781 (1980).
11
We hold that the district court did not abuse its discretion in including the language "or the way in which tax revenues are spent" in instruction No. 14. Instruction No. 14 is a correct statement of the law and did not permit the jury to speculate about appellant's political or social beliefs or to consider such beliefs, if any, in determining whether appellant acted willfully in failing to file income tax returns for the years in question.
12
Appellant next argues that the district court erred in denying his motion for judgment of acquittal on the ground that 26 U.S.C. Sec. 7203 is unconstitutionally vague. We must reject appellant's argument because we have previously held that 26 U.S.C. Sec. 7203 is not unconstitutionally vague. United States v. Russell, 585 F.2d 368, 369 (8th Cir.1978), citing United States v. Lachmann, 469 F.2d 1043, 1046 (1st Cir.1972), cert. denied, 411 U.S. 931, 93 S.Ct. 1897, 36 L.Ed.2d 390 (1973); see also United States v. Bowman, 602 F.2d 160, 162 n. 1 (8th Cir.1979) (per curiam).
13
Accordingly, the judgment of the district court is affirmed.
1
The Honorable William C. Stuart, Chief Judge, United States District Court for the Southern District of Iowa
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 10-12155 MAY 27, 2011
JOHN LEY
Non-Argument Calendar CLERK
________________________
D.C. Docket No. 1:84-cv-00148-MP
BILL R. WINCHESTER,
on behalf of himself and all other stockholders of
Florida Farm Bureau Equities, Inc.,
a Florida corporation similarly situated,
llllllllllllllllllll Plaintiffs,
versus
FLORIDA FARM BUREAU EQUITIES INC,
a Florida corporation.
lllllllllllllllllll Defendants,
FLORIDA FARM BUREAU FEDERATION,
a non profit general farm membership,
FLORIDA FARM BUREAU HOLDING CORPORATION,
CARL B. LOOP, JR., and SOUTHERN FARM BUREAU
LIFE INSURANCE COMPANY,
lllllllllllllllllll Movants - Appellees,
versus
BADGER PLAINTIFFS,
on behalf of Gene Badger, John Love,
Marvin Evans, Sid Banack and John Willis
as class members of the instant case,
lllllllllllllllllll Respondents - Appellants.
________________________
Appeal from the United States District Court
for the Northern District of Florida
________________________
(May 27, 2011)
Before EDMONDSON, CARNES and PRYOR, Circuit Judges.
PER CURIAM:
Gene Badger, John Love, Marvin Evans, Sid Banack, and John Willis,
derivatively on behalf of Plaintiffs’ Shareholders Corporation (PSC) and on behalf
of themselves and all other PSC shareholders who owned shares from August 25,
2004 to October 15, 2004 (the plaintiffs) appeal the district court’s order enjoining
their two class action lawsuits filed in 2008 and currently pending in Florida state
court. The plaintiffs contend that the federal district court lacked authority to
enjoin the state lawsuits under the Anti-Injunction Act, 28 U.S.C. § 2283, because
the injunction was not “necessary in aid of its jurisdiction.”
I.
2
In 1984 a class of shareholders, which included the plaintiffs,1 filed a
securities class action in the Northern District of Florida against virtually the same
defendants involved in this appeal.2 In 1987 the district court entered a final order
and judgment, which approved and incorporated the parties’ stipulation of
settlement and settlement agreement for that class action. The parties agreed in
the stipulation of settlement and the settlement agreement that the shareholder
class “shall be entitled to receive the same financial benefits it would receive if it
owned outright 27.7% of the common stock of” one of the defendant entities. To
accomplish that, the order and the settlement documents required one of the
defendants to issue a debenture to the class of shareholders, which gave that class
the same financial benefits as owning the common stock in that defendant. The
stipulation of settlement also provided that the defendants “will not take, or permit
any action . . . , which would dilute or reduce the interest of” the shareholder class.
The district court’s 1987 order also provided that: “Jurisdiction is hereby
retained . . . as to all matters relating to the administration, consummation,
enforcement, and/or interpretation of the terms of the [parties’ stipulation of
settlement and settlement agreement].” The parties agreed in the stipulation of
1
All of the plaintiffs in this appeal were among the members of the 1984 class of
shareholders or in privity with a member of that class.
2
Carl Loop, Jr., who is a defendant in this appeal, was not named in the 1987 lawsuit, but
he was an officer of one of the defendants that was named in that lawsuit.
3
settlement that the district court “shall retain jurisdiction with respect to
enforcement, construction and/or interpretation of the terms of the [stipulation]
and any agreement(s) related thereto.”3 Additionally, the settlement agreement
provided that “[a]ll parties to this Agreement acknowledge and consent to: . . . the
United States District Court for the Northern District of Florida having jurisdiction
with respect to the enforcement, construction, and/or interpretation of the terms of
this Agreement and the [stipulation of settlement].”
In 1995 the shareholder class, which, as we have already mentioned,
included the plaintiffs, set out to form PSC to hold the debenture on their behalf.
The district court entered an order, which was agreed to and signed by all parties,
approving PSC’s formation. In that order the district court summarized its 1987
order and the incorporated settlement documents, stating in part that it “retained
jurisdiction as to all matters relating to the administration, consummation,
enforcement, or interpretation” of the order and settlement documents and that “all
[shareholders, including the plaintiffs,] and [the defendants] agreed that all matters
relating to said settlement would properly and exclusively be brought in this
Court.” (emphasis added).
3
The parties also agreed in the stipulation to submit a final order “[r]eserving jurisdiction
over all matters relating to the administration, consummation, and enforcement of the settlement
provided herein.”
4
In 2004 one of the defendants purchased the debenture from PSC. In 2008
the plaintiffs, as shareholders of PSC, filed two state court actions in Florida,
including a shareholders’ class action and a derivative action on behalf of PSC,
which both arose out of the sale of the debenture.4 The state court complaints
alleged that the defendant that had purchased the debenture from PSC did so
without fully informing the plaintiffs before the sale about certain circumstances
related to the value of the debenture.
Both complaints included a claim against the defendants for alleged
breaches of the 1987 stipulation of settlement and settlement agreement, which, as
we have already noted, were incorporated into the district court’s 1987 final order
and judgment. The actions also included claims for alleged breaches of fiduciary
duties that were purportedly owed by the defendants to PSC and to the plaintiffs
directly under the order, the settlement documents, and the debenture created
pursuant to the order and settlement documents.5
On November 25, 2008, the defendants moved to enjoin the pending state
court actions in the federal district court for the Northern District of Florida.
Around the same time, the defendants also filed a motion in the Florida state court
4
The complaints also named various officers of the defendant entities in the state court
actions.
5
The derivative action also included a claim for fraud in the inducement against the
defendant that purchased the debenture.
5
for a stay pending a decision by the federal district court. The state court acted
first on January 13, 2009 and granted the stay. The state court reasoned that a stay
was necessary because the state court lawsuits likely involve “issues pertaining to”
the 1987 federal court order and the settlement documents incorporated in that
order, “which the United States District Court has reserved jurisdiction to
enforce.”
On April 9, 2010, the district court granted the defendants’ motion for an
injunction based on its authority under the All Writs Act, 28 U.S.C. § 1651(a).6
The court also found that the injunction fell within one of the exceptions to the
general prohibition against federal courts enjoining state court actions in the Anti-
Injunction Act, 28 U.S.C. § 2283. Specifically, the district court found “that an
injunction is necessary in aid of its continuing jurisdiction over [its order and the
settlement documents incorporated in that order].” The plaintiffs contend that the
district court erred by finding that the injunction was allowed under that exception
to the Anti-Injunction Act.
II.
6
In their briefs, the plaintiffs do not challenge the district court’s authority to issue the
injunction under the All Writs Act and have thus abandoned that issue in this appeal. See Access
Now, Inc. v. Sw. Airlines, Inc., 385 F.3d 1324, 1330 (11th Cir. 2004).
6
Whether a district court has the authority to enjoin a state court action under
an exception to the Anti-Injunction Act is a question of law that we review de
novo. See TranSouth Financial Corp. v. Bell, 149 F.3d 1292, 1294 (11th Cir.
1998). We review a district court’s interpretation of its own orders only for an
abuse of discretion. Alley v. U.S. Dep’t of Health & Hum. Servs., 590 F.3d 1195,
1202 (11th Cir. 2009). Deference is appropriate because “the district court is in
the best position to interpret its own orders.” Id.
The Anti-Injunction Act prohibits federal courts from enjoining state court
actions unless the injunction falls within three exceptions to that general
prohibition. 28 U.S.C. § 2283; Wesch v. Folsom, 6 F.3d 1465, 1470 (11th Cir.
1993). One exception allows a district court to enjoin a state court action when
doing so is “necessary in aid of its jurisdiction.” 28 U.S.C. § 2283; Wesch, 6 F.3d
at 1470. To fall within that exception, the injunction must be necessary “to
prevent a state court from so interfering with a federal court’s consideration or
disposition of a case as to seriously impair the federal court’s flexibility and
authority to decide that case.” Wesch, 6 F.3d at 1470 (quoting Atl. Coast Line
R.R. Co. v. Brotherhood of Locomotive Eng’rs, 398 U.S. 281, 295, 90 S.Ct. 1739,
1747 (1970). The exception is available to the district court both before and after
7
its entry of final judgment. See Battle v. Liberty Nat’l Life Ins. Co., 877 F.2d 877,
881 (11th Cir. 1989).
In this case the disposition of the state court actions would require
interpretation or enforcement of the district court’s order and the settlement
documents incorporated in that order. Both complaints filed by the plaintiffs
quoted from and relied heavily on the 1987 order, the settlement documents, and
the debenture created pursuant to the order and settlement documents. In fact, the
plaintiffs even attached the 1987 order, the stipulation of settlement, the settlement
agreement, and the debenture created pursuant to the order as exhibits to both state
court complaints. In the breach of contract claim included in each complaint, the
plaintiffs specifically alleged that the defendants “breached the Stipulation of
Settlement and/or the [settlement agreement] in the manner herein alleged which
resulted in PSC receiving less for the Debenture than it would had it owned
outright 27.7% of the common stock.”
The breach of fiduciary duty claims and the fraud claim similarly rely on the
1987 order. As we have already mentioned, in both the stipulation of settlement
and the settlement agreement the defendants agreed that the plaintiffs “shall be
entitled to receive the same financial benefits [they] would receive if [they] owned
outright 27.7% of” common stock and the defendants promised that they would
8
not take or permit action that would reduce or dilute the plaintiffs’ benefits. The
plaintiffs alleged for their fiduciary duty claims that the defendants owed them a
duty “not to take any action . . . that would result in PSC receiving less financial
benefit for the Debenture than it would if it owned outright 27.7% of the stock.”
Similarly, the plaintiffs alleged for their fraud claim that one of the defendants
fraudulently induced PSC to sell the debenture for less than the “financial benefits
it would receive if it owned outright 27.7% of the stock.” Both of those claims are
thus based on the promises made by the defendants in the stipulation of settlement
and the settlement agreement.
Perhaps most telling is the plaintiffs’ request for attorney’s fees under the
1987 stipulation of settlement. The plaintiffs demanded attorney’s fees in both
state court lawsuits under section 30 of the stipulation of settlement, which
provides that if “the enforcement, construction, and/or interpretation of this
[stipulation of settlement] is the subject of litigation between the parties, the
prevailing party shall be entitled to receive reasonable attorney’s fees.” Thus for
the plaintiffs to get attorney’s fees, the subject of the litigation had to be the
enforcement, construction, or interpretation of the 1987 stipulation of settlement.
It is thus clear that the disposition of the claims alleged in the state court
lawsuits would require the Florida state court to interpret and enforce the 1987
9
district court order and the settlement documents the order incorporated. The
district court, however, concluded in its 1995 order, which the plaintiffs agreed to,
that its jurisdiction over the disposition of such claims was exclusive. In fact, that
1995 order states that “all matters relating to” the enforcement or interpretation of
the order, including the settlement documents incorporated in that order, “would
properly and exclusively be brought in” the district court for the Northern District
of Florida. The district court did not abuse its discretion in concluding that it had
exclusive jurisdiction over the claims. See Battle, 877 F.2d at 881 (“[T]he need
for exclusive jurisdiction in the federal district court was recognized by the district
court’s explicit retention of jurisdiction in its final judgment.”).
Because state court judgments on the claims could have res judicata effect,
allowing the state court actions to proceed threatened the federal court’s exclusive
jurisdiction over them. Stated somewhat differently, any state court disposition of
the claims on the merits would “seriously impair the federal court’s flexibility and
authority” to decide issues related to its 1987 order over which it had retained
exclusive jurisdiction. The injunction clearly was in aid of the district court’s
jurisdiction.
AFFIRMED.
10
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386 N.W.2d 782 (1986)
MIDWAY MANOR CONVALESCENT AND NURSING HOME, INC., Appellant,
v.
Dr. Madeline ADCOCK, et al., Ann Newman, et al., Respondents.
No. C6-85-2127.
Court of Appeals of Minnesota.
May 13, 1986.
*783 John M. Broeker, Samuel D. Orbovich, Broeker, Mihalchick & Blumer, Bloomington, for appellant.
Timothy R. Murphy, Geraghty, O'Loughlin & Kenney, P.A., St. Paul, for Dr. Madeline Adcock, et al.
Tom Foley, Ramsey Co. Atty., David M. Fortney, Asst. Co. Atty., St. Paul, for Ann Newman, et al.
Heard, considered and decided by SEDGWICK, P.J., and HUSPENI and NIERENGARTEN, JJ.
OPINION
SEDGWICK, Judge.
Midway Manor Convalescent Nursing Home appeals from a summary judgment. Midway Manor sued Dr. Margaret Adcock and her employers Ramsey Clinic Associates, P.A. and Medical Education and Research *784 Foundation, along with Ann Newman and her employers St. Paul Ramsey Medical Center and St. Paul Ramsey Medical Center Commission, claiming deprivation of its constitutional rights to due process and equal protection and defamation and tortious interference with its business practice. Partial summary judgment on Midway Manor's constitutional claims was denied. The trial court held that Midway Manor had no protectible property interest in receiving patient referrals from defendants and defendants were granted summary judgment on these claims. Defendants Adcock and her employers, Medical Education and Research Foundation and Ramsey Clinic Associates, P.A., were granted summary judgment on all remaining claims. Midway Manor claims it was entitled to summary judgment on its constitutional law claims and that material issues of fact exist on its other claims. We affirm.
FACTS
In February 1981, Dr. Margaret Adcock, an associate of Ramsey Clinic, P.A. and director of nursing home services for Ramsey Medical Center (Ramsey Hospital), sent a letter to Ann Newman, director of social services at Ramsey Hospital, reporting her observations of "an exorbitant number of skin breakdowns among our patients, as well as other problems," and that "perhaps" there was "some understaffing" at Midway Manor Convalescent Nursing Home (Midway Manor). A copy of the letter was sent to Midway Manor's administrator.
Newman provided copies of this letter to her staff and directed them that it would be wise to check with Dr. Adcock's office before sending patients to Midway Manor. Newman had received reports from patients and their families which substantiated Dr. Adcock's observations and had made similar observations herself. Newman met with the administrator of Midway Manor in late February to discuss these problems. In addition, Dr. Adcock contacted the Health Department.
Respondents Newman, Adcock and the hospital's social worker staff frequently consult with patients and their families about the availability of appropriate nursing home facilities. Newman stated at her deposition that this usually involves providing patients with information. The patients and their families select a home and a social worker prepares the documents transferring them from the hospital to the home.[1] Newman said this process always involved a "great deal of peer consultation." The social workers often rely on feedback from patients, their families, attending physicians and the nurse practitioners who visited the homes in providing patients with information about an appropriate home. The basic policy, according to Newman, is "to find the best home for the patient."
Dr. Adcock monitors about 950 patients residing in over 30 Twin Cities' nursing homes. Dr. Adcock explained:
I feel strongly if I can help people in making decisions about where to place a family member I'm going to do it. I think our elderly should be placed in the best home that's possible for them considering their medical problems, where the family lives, things like that. So I often do speak out on what I think about nursing homes.
Dr. Adcock explained that:
we actually have no control over what home they will go to at all and often don't know what home they will go to until they're actually placed. We try to be available for consultation, but we are not intimately involved or allowed to be involved in the placement of most patients.
When asked what referral policy her clinic used regarding Midway Manor, Dr. Adcock stated that: *785 there was not an active effort to send patients to Midway Manor. I don't think at any time we have refused to allow people to choose Midway Manor as their nursing home of choice because we've constantly gotten referrals that have been in St. Paul-Ramsey that have come to Midway Manor.
Newman and her staff did not actively refer patients to Midway Manor from February 1981 to March 1983. During this period, Dr. Adcock sent Newman five letters describing unfavorable conditions she observed at Midway. Newman sent copies of these letters to Midway Manor. Newman stated that observations from Dr. Adcock and nurse practitioners monitoring patients at Midway Manor caused concern in the following areas: poor food (high sodium content, poor taste, insufficient amounts), understaffing, frequent turnover of staff, physical plant deficiencies, skin disorders in the patients, nurses not following doctor's orders on medications, and insufficient bed clothing.
Prior to February 1981 Midway Manor had received bad publicity in the newspapers about its food and poor quality of care. A number of complaints were received by the health department's investigation division from February 1981 through March 1983.
Health department investigations substantiated many complaints. On one visit a health department investigator noted the cook lacked supplies to prepare food in appropriate quantities for the patients' minimum daily requirements. For example, patients received only a few dices of vegetables. The investigator also learned that it was Midway Manor's practice to puree whatever was leftover for patients without teeth rather than planning a menu for them.
Midway Manor was cited on at least one visit for falling below the required nursing level of 2.0 hours/patient/day. Other investigation reports substantiate Dr. Adcock's observations that Midway Manor was staffed very close to the minimum. Allegations such as inadequate bed linens and inadequate food were also substantiated by health department investigations and citations.
In December 1982 Newman visited Midway Manor to determine whether improvements had been made. Newman determined that the physical plant was improved and that there seemed to be adequate linens available. However, she consulted with Dr. Adcock and learned that she continued to have concerns about the nursing staff. The no referral policy continued until March 1983, when Dr. Adcock's main concerns about Midway Manor had been satisfied. The hospital's social worker staff was accordingly informed that active referrals could again be made.
ISSUES
Was summary judgment properly granted for respondents on appellant's:
1. constitutional law claims?
2. tort claims?
ANALYSIS
I.
Midway Manor argues that the trial court erred in denying summary judgment on its claims that respondents violated its right to procedural and substantive due process and equal protection under the laws.
A. Due process
A person is entitled to procedural due process whenever a state's action may deprive the party of a protectible property interest. See Board of Regents v. Roth, 408 U.S. 564, 576-77, 92 S.Ct. 2701, 2708-2709, 33 L.Ed.2d 548 (1972). A protectible property interest may be derived from state law.
Property interests, of course, are not created by the Constitution. Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law rules or understandings that secure certain benefits *786 and that support claims of entitlement to those benefits.
Id. at 577, 92 S.Ct. at 2709.
The trial court found that Midway Manor had no protectible property interest in patient referrals from Ramsey Hospital. Midway Manor has not asserted any statutory entitlement to such referrals. Respondents distinguish the Wisconsin case Midway relies on, Cameo Convalescent Center, Inc. v. Senn, 738 F.2d 836 (7th Cir.1984), noting that Wisconsin statutes give nursing homes a property interest in referrals from state social service departments and agencies. Minnesota has no such law and does not have a mechanism whereby a nursing home can suddenly be blacklisted by all referring state social service agencies for failure to comply with certain standards. Cf. Wis.Stat. § 50.04(4)(d); see generally Cameo, 738 F.2d 836 (discusses list and Wisconsin law).
Other cases cited by Midway Manor can also be distinguished because they involve a complete termination of the financial relationship between government and a private party, without warning, recourse or discussion. See e.g. Orloff v. Cleland, 708 F.2d 372 (9th Cir.1983) (veterans' hospital suspended a staff physician's privileges even though it had appointed him to an indefinite term).
Here, Midway Manor has not claimed that all state social service agencies have blacklisted it. In fact, Midway Manor continued to receive referrals from Ramsey Hospital. Affidavits of hospital employees indicate that despite a non-active referral position, 16-18 patients were transferred to Midway Manor during the period. In addition, Midway Manor was fully informed of Dr. Adcock's negative observations and Newman's concerns with its facility. Eventually the problems were corrected.
Ramsey Hospital and Midway Manor subscribe to a "Community Wide Transfer Agreement" between hospitals and related health facilities which indicates the forms a hospital should prepare and send with a patient transferring to a nursing home. The stated purpose of the agreement is
to secure for all parties to this agreement the benefits of standardized information and procedures accompanying an individual's transfer between signatory facilities, thus promoting operating efficiency of the individual's transfer.
No language in this agreement can be construed as entitling a home to referrals.
We find no merit to Midway's claim that respondents usurped the state's role of monitoring a home's compliance with statutory standards and regulations. The health care professionals here simply recommended that their patients, who include the elderly and disabled, be placed in nursing homes which were best equipped to meet the patients' health care needs. Their only motive in recommending nursing homes was to provide for the best interests of the patients. Newman and Dr. Adcock both testified that the ultimate decision was made by the patient. Midway Manor's success depends on the vote of the consumer. Its license is not a guarantee of either profit or ensured referrals from county hospitals.
Doctors and hospital social workers should exercise their honest professional judgment and discretion in recommending a suitable nursing home for the elderly or disabled who require such special care.
B. Equal protection and substantive due process
The trial court found that all of the nursing homes in the Twin Cities area were subject to the same referral practices as appellants, and that these practices were rationally related to the respondents' legitimate interest in finding suitable nursing home care for patients. It also found that the respondents had no reason to believe that they were violating clearly established law when they carried out their referral practices. Therefore, Midway Manor's equal protection and due process claims are not actionable.
*787 The trial court properly determined this issue on the summary judgment motion because whether state action is rationally related to a legitimate government purpose is a legal issue. See Galvin v. Vermont, 598 F.Supp. 144, 150 (D.Vt.1984).
The trial court applied the proper criteria and its conclusion that a rational relationship existed between respondents' actions and the legitimate goal of patient care is not erroneous. In equal protection analysis, "the pertinent inquiry is whether the classification employed * * * advances legitimate legislative goals in a rational fashion." Schweiker v. Wilson, 450 U.S. 221, 234, 101 S.Ct. 1074, 1082, 67 L.Ed.2d 186 (1981). Further,
If the classification has some `reasonable basis,' it does not offend the Constitution simply because the classification `is not made with mathematical nicety or because in practice it results in some inequity.' Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61 [31 S.Ct. 337, 55 L.Ed. 369].
Id. at 235, 101 S.Ct. at 1083 (quoting Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970)).
The finding of a rational relationship between the action and purpose also indirectly satisfies the substantive due process test:
Due process also requires that legislative enactments not be arbitrary or capricious or, stated another way, that they be a reasonable means to a permissible objective. Nebbia v. New York, 291 U.S. 502 [54 S.Ct. 505, 78 L.Ed. 940 (1934)] * * *.
Hylen v. Owens, 251 N.W.2d 858, 861 (Minn.1977) (other citations omitted). The decision to refrain from actively referring patients to Midway Manor was not arbitrary or capricious when it was done, as Dr. Adcock, Newman and the hospital social workers testified, to help patients select the best and most suitable nursing home available for them.
II.
Midway Manor claims that the trial court erred in granting respondents summary judgment on its tort claims because triable issues were raised.
A. Defamation
The trial court found that:
Plaintiff's defamation claim is without merit. The record is devoid of any facts tending to prove that the defendants published defamatory statements to patients or the family of patients seeking nursing home care. If such publication did occur, the communications were privileged because of the duties owed by the defendants to the patients, and because of the overriding common interest in finding suitable nursing home care for the patients. There are no facts to indicate that the defendants abused the privilege by acting in bad faith.
Midway Manor failed to present any evidence indicating that the respondents published defamatory statements to patients or their families. Dr. Adcock and Newman each stated that their observations of Midway Manor merely kept them from affirmatively recommending the home to patients seeking counsel about appropriate placement, that their actions were guided by the best interests of the patients, and that no patient was dissuaded from selecting Midway Manor.
Midway cannot defeat a summary judgment motion by merely alleging a jury issue:
[T]he rule in Minnesota is that a party cannot rely upon general statements of fact to oppose a motion for summary judgment. Instead, the nonmoving party must demonstrate at the time the motion is made that specific facts are in existence which create a genuine issue for trial.
Moundsview Independent School District No. 621 v. Buetow & Associates, Inc., 253 N.W.2d 836, 838 (Minn.1977) (citations omitted). In addition,
A party cannot create a fact issue by claiming that the facts which may be developed on cross-examination at the *788 time of trial will permit him to reach the trier of facts.
Borom v. City of St. Paul, 289 Minn. 371, 374-75, 184 N.W.2d 595, 597 (1971).
The depositions and answers to interrogatories all support the truth of the statements made in Dr. Adcock's letters. No affidavits or other information submitted by Midway Manor contradicted respondents' evidence at the time the summary judgment motion was considered. Although Midway Manor argues the truth or falsity of Dr. Adcock's statements should be submitted to a jury, we agree with the trial court that no jury question was posed.
B. Tortious interference with business relations
The trial court found that respondents did not tortiously interfere with a prospective advantage to Midway Manor from nursing home referrals, and that the challenged referral practices were not wrongful but were justified and protected by the discretionary immunity doctrine.
Tortious interference with a business relationship is:
based on "the intentional doing of a wrongful act without legal justification or excuse, or otherwise stated the wilful violation of a known right * * *, malice in the sense of ill-will or spite not being essential." * * *
Witte Transportation Co. v. Murphy Motor Freight Lines, Inc., 291 Minn. 461, 465-66, 193 N.W.2d 148, 151 (1971) (emphasis supplied) (citations omitted).
Here, as with the defamation claim, Midway Manor cannot defend a summary judgment motion by mere allegations. Midway Manor did not produce any evidence showing that respondents acted with bad motives when respondents adopted their policy of not affirmatively recommending Midway Manor. See Moundsview, 253 N.W.2d 836.
The trial court decision is supported on alternate grounds because public employees who perform discretionary acts are immune from tort liability. See Minn.Stat. § 466.03, subd. 6 (1984).
This exemption from tort liability recognizes that the courts, through the vehicle of a negligence action, are not an appropriate forum to review and second-guess the acts of government which involve "the exercise of judgment or discretion." Susla v. State, 311 Minn. 166, 175, 247 N.W.2d 907, 912 (1976).
Cairl v. State, 323 N.W.2d 20, 23 (Minn. 1982).
To determine whether discretionary immunity exists, a court "must examine the nature of the decisionmaking process to determine whether discretionary immunity obtains." Id. Here, as in Cairl, the selection of an appropriate facility for the patients required the professional evaluation of each patient's particular needs. This type of decision is "precisely the type of governmental decision that discretionary immunity was designed to protect from tort litigation by after-the-fact review." Id.
Further, as the supreme court points out:
A significant consideration in determining the applicability of discretionary immunity is the extent to which the threat of liability would impair the effective performance of the governmental act complained of. See Restatement (Second) of Torts § 895D comment b (1979).
323 N.W.2d at 23, n. 3. Thus, since failure to grant immunity to the hospital's social workers, who counsel patients about available and appropriate nursing homes, would impair their effective performance, discretionary immunity was appropriately recognized by the trial court.
DECISION
The trial court properly dismissed appellant's constitutional law claims against respondents as a matter of law. The trial court properly dismissed the tort claims as a matter of law and also because appellant failed to demonstrate the existence of any triable issues.
Affirmed.
NOTES
[1] The parties have agreed, by virtue of a "Community Wide Transfer Agreement," that a hospital shall send a certain form with standardized information and itemize a patient's belongings when transferring a patient to a nursing home.
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20 B.R. 357 (1982)
In the Matter of Jay W. HEMMINGER, i/a/d/b/a Somerset Farmers Supply, Debtor.
Jay W. HEMMINGER, i/a/d/b/a Somerset Farmers Supply, Plaintiff,
v.
ALLIED FARM EQUIPMENT; American Acceptance Corp.; Ariens Credit Corporation; Borg-Warner Acceptance Corp.; Deutz Corporation; Hamilton Equipment, Inc.; Jacques Seed Company; Owatonna Manufacturing Co., Inc.; Owatonna Manufacturing Company Acceptance, Inc.; Piper Industries, Inc.; West Central Production Credit Association; Robert R. Singo & Betty Jane Singo; Stull Company; United States National Bank; United States of America, Small Business Administration, Defendants.
Bankruptcy No. 81-2512, Adv. No. 82-522.
United States Bankruptcy Court, W.D. Pennsylvania.
May 10, 1982.
Christopher Beck, Pittsburgh, Pa., for debtor.
Vincent Barbera, Somerset, Pa., for Singos.
Thomas Zwilling, Pittsburgh, Pa., for U.S. Bank of Johnstown.
MEMORANDUM OPINION
GERALD K. GIBSON, Bankruptcy Judge.
The matter presently before the Court is debtor's complaint to sell property at adversary number 82-522, wherein two secured creditors dispute the validity, priority and extent of their relative security interests in the assets proposed for sale. The narrow issue presented in the case at bar is the continued effectiveness of a financing statement under Article Nine of the Uniform Commercial Code when debtor changes his trade name subsequent to the secured creditor's filing of the statement.
Defendants Robert and Betty Jane Singo argue that their security interest in debtor's assets remains perfected notwithstanding the post-filing change of debtor's trade name. Defendant, United States National Bank of Johnstown, argues that since the Singos' financing statement described collateral as assets of debtor's business under its original name, the financing statement is insufficient to perfect a security interest in assets of the same business operating under a new name.
For the reasons that follow, the Court concludes that the Singo financing statement and security agreement comply with the requirements of Article Nine of the Uniform Commercial Code, 13 Pa.C.S.A., and therefore secure the collateral described therein. As between the Singos and the United States National Bank of Johnstown, the Court resolves the present dispute between *358 secured creditors in favor of the Singos, pursuant to 13 Pa.C.S.A. 9312(e)(1) of the Uniform Commercial Code.
The relevant facts are as follows. In January, 1976, plaintiff Jay W. Hemminger entered into an Agreement of Sale with Robert and Betty Jane Singo, (hereinafter "Singos"), for the purchase of real estate, accounts receivable, inventory, and other personal property of a business known as "Singo Feed." Of the $370,000.00 purchase price, a sum of $100,800.00 was paid at the closing. The remaining balance was due over a fifteen year period in yearly installments of $17,946.67 plus eight percent interest. To date, plaintiff has made all payments with the exception of that due in February, 1982. As security for their loan, the Singos retained legal ownership of the real estate. The Agreement of Sale further provided for the Singos' retention of a security interest in specified property relating to the business.
On February 5, 1976, the Singos filed a financing statement in the Office of the Recorder of Deeds for Somerset County; Office of the Prothonotary of Somerset County; and Secretary of the Commonwealth of Pennsylvania. The financing statement listed Jay W. Hemminger, in his individual capacity, as debtor. The Singos were listed as the secured parties; and the collateral was described as follows:
"Motor vehicles, machinery, equipment, office trailer, office furniture and furnishings, shelving, inventory of feed, medications, fertilizers and farm supplies situate on the premises formerly owned by Secured Parties in Somerset Boro., Somerset County, Pa., used by debtor trading as "SINGO FEED", and accounts receivable of said business."
Debtor, herein plaintiff, also signed a judgment note for the unpaid balance of the purchase price of "Singo Feed" in the amount of $269,200.87.
On February 4, 1976, plaintiff entered into an agreement with the United States National Bank of Johnstown, (hereinafter "the Bank"), for the loan of $100,000.00, on which no payment is currently due. Said amount was applied as a down payment on the purchase price of "Singo Feed." Plaintiff and the Bank executed a note which provided that the note of the Singos was junior to that of the Bank as to all property other than the assets of the business known as "Singo Feed"; and further, that the note of the Bank was junior to that of the Singos as to all property and assets known as "Singo Feed". Thus it is clear that the Bank had actual knowledge of the provisions of the Singo-Hemminger sale and security agreement.
In November, 1979, and January, 1981, the Bank loaned additional funds to plaintiff, for which it took a security interest in Hemminger's property known as "Somerset Farmers Supply Co.", a continuation of "Singo Feed". On February 2, 1981, the Bank filed a financing statement, wherein Jay W. and Carolyn Hemminger, t/a Somerset Farmers Supply Co. were listed as debtors. The Bank was listed as the secured party, and the collateral was described as follows:
"lien on machinery and equipment, excluding automotive, furniture and fixtures, inventory, accounts receivable, books, records, invoices, contract rights, chattel paper, documents, instruments, general intangibles, now owned and hereafter acquired, and proceeds thereof; including but not limited to insurance proceeds."
On September 23, 1981 Jay W. Hemminger, d/b/a Somerset Farmers Supply filed a petition under Chapter 11 of the Bankruptcy Code. Presently before the Court is plaintiff's complaint to sell property, wherein plaintiff discloses an offer to purchase certain of his assets from "Somerset Farmers Supply". The assets to be sold include all assets secured by the Singos to the extent of Singos' security interest in the same; and various vehicles and records secured to the Bank. The assets are more specifically described as follows:
(1) real estate
(2) machinery, equipment, office trailer, office furniture, furnishings and shelving, certain motor vehicles *359 (which have been subsequently released in favor of Bank's security interest), inventory and feed, medications, fertilizer, farm supplies and accounts receivable known as SINGO FEED.
(3) vehicles as follows: 1971 Chevrolet Truck; 1974 International Truck; 1974 Ford Truck; 1979 Dodge Truck; and 1979 Chevrolet Truck (serial numbers omitted).
(4) Books, records, invoices and other documents constituting the business records of "Somerset Farmers Supply".
It is further stated in the complaint that the categories of assets in which Singos have a security interest shall be sold only to the extent of the full amount of the Singos security interest on a priority basis as follows:
a) all real estate, machinery, equipment, office furniture, furnishings, shelving, inventory of feed, medications, fertilizers and farm supplies; and
b) accounts receivable to the extent necessary to bring the total value of the items purchased up to the full amount of the Singos' secured debt.
As stated in the complaint, the assets in paragraphs (1) and (2) shall be paid by the Purchaser's assumption of debt to Singos, and the payment of the February, 1982 installment plus interest. Payment of $11,000 shall be made to the Bank by Purchaser for the assets described in paragraphs (3) and (4).
The conditions of sale require the provision of the following material at the time of sale: a complete inventory of all property subject to the Singos' security interest; a list of all outstanding receivables at the time of sale; and a list of all receivables which have been collected and placed in the escrow account.
In its complaint, plaintiff requests the Court's entry of an order divesting any security interests of the named defendants; and their transfer to a fund to be derived from the sale pending a later determination as to their respective priority, validity and extent, except to the extent that certain liens and debts are assumed by the Purchaser.
The Court now reaches the narrow issue before it: whether the Singos continue to have a perfected security interest in assets of the debtor as described in the 1976 financing statement, notwithstanding the debtor's change of trade name from that contained therein.
The Singos contend that since their security interest was properly perfected under the Uniform Commercial Code, and filed first in time, it has priority over that of the Bank. On the other hand, the Bank argues that the terms of the 1976 Singo security agreement and financing statement create and perfect a security interest only in assets of the debtor trading as "Singo Feed", and not in the assets of the debtor trading as "Somerset Farmers Supply". According to its argument, the debtor's change of name subsequent to the Singos' filing rendered the Singos' financing statement, wherein collateral was described as assets of "Singo Feed", ineffective. Since the Singos' security interest is ineffective, the Bank further argues that it has first priority lien on the assets (other than real property) proposed for sale.
The Court disagrees. For the reasons that follow, the Court concludes that the 1976 Singo security agreement and financing statement comply with the requirements of Article Nine of the Uniform Commercial Code. The Court further finds the following. The designation "used by the debtor t/a SINGO FEED" which appears in the financing statement description of the collateral was not seriously misleading to creditors despite debtor's late change of trade name. Further, the Bank had actual knowledge of the terms of the Singo-Hemminger Agreement of Sale. Therefore, it is implausible that the notice provided by the financing statement was insufficient or misleading. Additionally, the Uniform Commercial Code, as adopted in Pennsylvania, imposes no duty upon a secured creditor to amend a financing statement subsequent *360 to a debtor's change of trade name. This is particularly true for a financing statement indexed under debtor's true name, as in the present case, for the likelihood of misleading creditors is minimal.
An examination of the provisions of Article Nine and the case law thereunder reveals the following. The Uniform Commercial Code adopts a system of "notice filing", which requires only the filing of a simple notice indicating that a secured party may have an interest in the collateral described. In re Platt, 257 F.Supp. 478, 3 UCCRS 719 (E.D.Pa.1966).
Section 9402(a) of the Uniform Commercial Code, 13 Pa.C.S.A., provides that a financing statement is sufficient if it is signed by the debtor and secured parties; gives an address of the secured party from which information concerning the security interest may be obtained; gives a mailing address of the debtor; and contains a statement indicating the types, or describing the items of collateral. Section 9402 further provides that a financing statement in substantial compliance with the above requirements is effective, even though it contains errors which are not seriously misleading.
Section 9110 states that the description of personal property is sufficient if it "reasonably identifies what it describes." This test is essentially the same for a financing statement as for a security agreement. Klingner v. Pocono International Raceway, Inc., 289 Pa.Super. 484, 433 A.2d 1357, 31 UCCRS 1223 (1981). The description need not be specific or exact, as long as it provides creditors with sufficient notice to inquire further. Heights v. Citizens Nat. Bank, 463 Pa. 48, 342 A.2d 738, 17 UCCRS 337 (1975). Exact and detailed descriptions have been rejected by the Code. A financing statement which generates further inquiry is sufficiently descriptive; (In Re Varney Wood Products, 458 F.2d 435, 10 UCCRS 513 (4th Cir. 1972), for the purpose of the financing statement is merely to warn creditors, rather than identify collateral. The UCC puts the burden on the creditor to seek clarification. Thorp Commercial Corp. v. Northgate Industries, Inc., 654 F.2d 1245, 31 UCCRS 801 (8th Cir. 1981).
Against this general background, the Court now looks to the issue of the sufficiency of the financing statement description when the debtor undergoes a change of name subsequent to the secured creditors filing of the statement. It has been held that a secured creditor has no duty to refile a financing statement upon learning of a debtor corporation's change of name. In re Thermal Barriers, Inc., 8 B.R. 294, 31 UCCRS 364 (E.D.Mich.1981). Accord: In re Grape Arbor, 6 UCCRS 632 (E.D.Pa.1969). Nor does the secured creditor have a duty to amend the financing statement to reflect the dissolution of a partnership and subsequent name change. In re Miraglia, 11 B.R. 77, 31 UCCRS 1196 (Bkrtcy.W.D.N.Y.1981).
The Bank relies on a contrary holding in In re Kalamazoo, 503 F.2d 1218 (6th Cir. 1974), which can be readily distinguished on the basis of its facts. In that case, the entity was a corporation; and the secured party had knowledge of the debtor's new name prior to the filing of the financing statement. In that instance, filing and indexing under the original corporate name was misleading and an indication of secured party's bad faith.
Recently, a number of states have adopted § 9-402(7) of the Uniform Commercial Code, (Pennsylvania not included), which addresses the secured creditor's duty to alter financing statements upon the debtor's change of name or structure. The section, in pertinent part, provides as follows:
"Where the debtor so changes his name, or in the case of an organization, its name, identity or corporate structure that a filed financing statement becomes seriously misleading, the filing is not effective to perfect a security interest in collateral acquired by the debtor more than four months after the change, unless a new appropriate financing statement is filed before the expiration of that time."
Pennsylvania has declined to enact this section of the Uniform Commercial Code. *361 As stated by Judge Washabaugh in In Re Serrins Automotive Warehouse, 18 B.R. 718, 29 UCCRS 1418 (Bkrtcy.W.D.Pa.1980) "refusal of the legislature to adopt such amendment results in the reaffirmation of the existing law to the effect that the security interest continues after the name change goes into effect." (p. 1421)
Other courts have similarly declined to impose upon a secured creditor a duty to refile upon debtor's name change when no such requirement appears in their version of the UCC. Continental Oil Co. v. Citizens Trust and Sav. Bank, 397 Mich. 203, 244 N.W.2d 243, 19 UCCRS 1234 (1976).
In this light, the Court now considers a decision of the Missouri Court of Appeals, which is directly on point. The facts of Drysdale v. Cornerstone Bank, 562 S.W.2d 182, 23 UCCRS 1072 (Mo.App.1978) are as follows. In November, 1970, plaintiff sold business known as "Drysdale Ford Sales, Inc." to McAdams. McAdams obtained financing from the Bank for the purchase of said business. As security for its loan, the parties executed a security agreement. In November, 1970, the Bank filed a financing statement which listed debtors' names as "Sam and Anna McAdams, d/b/a Drysdale Ford Sales." The description of collateral was as follows: "All contents of DRYSDALE FORD SALES, Southwest City, Missouri, including all parts, shop equipment, . . .". From March 31, 1970, debtor did business as "McAdams Ford", a sole proprietorship. In 1975, plaintiff loaned funds to McAdams whereupon debtor granted plaintiff a security interest in debtor's equipment.
Plaintiff argues that the Bank's 1970 financing statement, filed prior to debtor's name change, wherein collateral is described as "assets of DRYSDALE FORD SALES" is insufficient and seriously misleading, for it gives creditors no notice that assets of McAdams Ford were encumbered.
The Missouri Court of Appeals holds that the secured creditor, who filed a financing statement under debtor's true name, wherein collateral was described as assets of a trade name later changed, continued to have a perfected security interest in the named assets. The post-filing change of debtor's name was not sufficient to render the secured party's perfected security interest ineffective.
This Court reaches the same conclusion. Based on the foregoing, the Court concludes that the 1976 Singo financing statement and security agreement comply with the provisions of Article Nine of the Uniform Commercial Code, 13 Pa.C.S.A. Accordingly, the Singos have a perfected security interest in the specified assets of debtor's business. Since the Singos' perfection by filing was prior in time to that of the Bank, the Singos prevail on the basis of 13 P.C.S.A. 9312(e)(1).
An appropriate order will be entered.
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Filed 4/26/13 Cambridge v. Holland CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
RICHARD CAMBRIDGE,
Plaintiff and Respondent, E053672
v. (Super.Ct.No. CIVVS1000888)
MILTON HOLLAND, OPINION
Defendant and Appellant.
APPEAL from the Superior Court of San Bernardino County. Steve Malone,
Judge. Affirmed.
Kevin McBride for Defendant and Appellant.
Law Offices of Charles D. Nachand, Charles D. Nachand and Richard B. Hudson
for Plaintiff and Respondent.
Defendant and appellant Milton Holland appeals from an order denying his special
motion to strike pursuant to Code of Civil Procedure section 425.16 (hereinafter section
425.16). The appeal is authorized by Code of Civil Procedure section 904.1, subdivision
(a)(13).
1
The trial court denied the motion on grounds that, “although defendant Holland
has met his burden of showing that the causes of action arise, in part, out of his protected
speech, [p]laintiff [and respondent] Cambridge has met his burden of showing that he has
a probability of prevailing based on his showing that Holland made defamatory and
unprivileged statements to Ms. Beckman and Mr. Duffey accusing plaintiff of a crime.”
(Underscore omitted.)
I
THE SPECIAL MOTION TO STRIKE
“Section 425.16 provides in relevant part that: „A cause of action against a person
arising from any act of that person in furtherance of the person‟s right of petition or free
speech under the United States or California Constitution in connection with a public
issue shall be subject to a special motion to strike, unless the court determines that the
plaintiff has established that there is a probability that the plaintiff will prevail on the
claim.‟ [Citation.] „The Legislature enacted section 425.16 to prevent and deter
“lawsuits brought primarily to chill the valid exercise of the constitutional rights of
freedom of speech and petition for the redress of grievances.” [Citation.] Because these
meritless lawsuits seek to “deplete the defendant‟s energy” and drain “his or her
resources [citation], the Legislature sought to prevent SLAPPs[1] by ending them early
and without great cost to the SLAPP target.” [Citation.] Section 425.16 therefore
1 SLAPP is an acronym for “[S]trategic [L]awsuits [A]gainst [P]ublic
[P]articipation.” (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 813, overruled on
other grounds in Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68.)
2
establishes a procedure where the trial court evaluates the merits of the lawsuit using a
summary-judgment-like procedure at an early stage of the litigation.‟ [Citations.]”
(Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 278; see also Oasis West
Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 819-820.)
Section 425.16, the anti-SLAPP statute, therefore “permits a court to dismiss
certain types of nonmeritorious claims early in the litigation. [Citation.]” (Chavez v.
Mendoza (2001) 94 Cal.App.4th 1083, 1087.)
Specifically, “[r]esolution of an anti-SLAPP motion „requires the court to engage
in a two-step process. First, the court decides whether the defendant has made a
threshold showing that the challenged cause of action is one arising from protected
activity. The moving defendant‟s burden is to demonstrate that the act or acts of which
the plaintiff complains were taken “in furtherance of the [defendant]‟s right of petition or
free speech under the United States or California Constitution in connection with a public
issue,” as defined in the statute. [Citation.] If the court finds such a showing has been
made, it then determines whether the plaintiff has demonstrated a probability of
prevailing on the claim.‟ [Citation.]” (Jarrow Formulas, Inc. v. LaMarche (2003) 31
Cal.4th 728, 733.)
II
THE TRIAL COURT‟S DECISION
As noted above, the trial court found defendant had met his burden of showing
that the action arose from his exercise of his free speech rights in connection with a
3
public issue. However, it then determined that plaintiff demonstrated a probability of
prevailing on his defamation claim.
The issues presented are whether the latter determination is correct and whether
defendant has shown, as a defense, that the statements are absolutely privileged under
Civil Code section 47.
III
THE STATEMENT OF DECISION
The trial court‟s statement of decision succinctly summarizes the facts as follows:
“This Special Motion to Strike plaintiff Cambridge‟s First Amended Complaint (FAC)
and the demurrer to the FAC arise out of a dispute between two members of the Apple
Valley Village Property Owners Business Improvement District (PBID). Cambridge
alleges that the dispute arose when Holland sought reimbursement of $1,000.00 for
equipment and materials required to take pictures of a sign under discussion by the PBID
[by] falsely claiming that Cambridge had authorized the expenditure. Cambridge alleges
that Holland has falsely accused him of stealing money from PBID and made other false
accusations. Cambridge sues alleging, in the FAC, causes of action for 1) Defamation
and 2) Injunctive Relief.”
As noted above, the trial court found defendant‟s statements were made in
exercise of his free speech rights in connection with a public issue.
4
IV
PROBABILITY OF PREVAILING ON THE DEFAMATION CLAIM
Since the SLAPP statute is aimed at weeding out unmeritorious claims, the
SLAPP motion should be granted unless plaintiff has demonstrated a probability of
prevailing on his defamation claim. (§ 425.16, subd. (b).)
The trial court relied on ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th
993: “To show a probability of prevailing for purposes of section 425.16, a plaintiff must
„“„make a prima facie showing of facts which would, if proved at trial, support a
judgment in plaintiff‟s favor.‟”‟ [Citation.] This standard is „similar to the standard used
in determining motions for nonsuit, directed verdict, or summary judgment,‟ in that the
court cannot weigh the evidence. [Citation.] However, the plaintiff „cannot simply rely
on the allegations in the complaint‟ [citation], but „must provide the court with sufficient
evidence to permit the court to determine whether “there is a probability that the plaintiff
will prevail on the claim.”‟ [Citation.]‟” (Id. at p. 1010.)
Disregarding the statements made in public proceedings or in connection with
protected free speech activities, the trial court examined the evidence showing that
defendant made defamatory statements to private persons.
The evidence submitted by plaintiff consists of three declarations. The trial court
succinctly described the declarations as follows: “Cambridge presents the declaration of
Donald Duffey [(Duffey)] who declares that Holland came to his place of business with a
petition he believed was related to the PBID and that after Duffey told him that he was
not interested in the petition, Holland told him that Mr. Cambridge was a crook. Duffey
5
Declaration ¶¶ 2-4. Cambridge also presents the declaration of Soni[] Beckman
[(Beckman)], an administrative consultant to the PBID, who declares that some time after
the September 2009 PBID meeting, Holland called her and, after informing her that he
did not intend to sue her, stated that Cambridge „was a crook and embezzler.‟ Beckman
Declaration ¶ 9. Beckman also declares that, after the November 2009 PBID meeting,
Holland approached her in the parking lot and told her that Cambridge „was a crook and
had embezzled funds. Beckman Declaration ¶ 12. Cambridge presents his own
declaration where he states that Holland‟s statements were false and denies receiving any
money to build the sign which was the apparent basis for Holland‟s claims that
Cambridge acted inappropriately. Cambridge Declaration ¶¶ 10, 13, 17, 18.”
Setting aside the question of whether defendant has successfully established his
privilege defense, it is apparent that the declarations establish at least a prima facie case
of defamation by slander. (Civ. Code, §§ 44, 46.) As the trial court points out, slander
includes a false and unprivileged oral communication which accuses a person of a crime.
(Civ. Code, § 46.)
Defendant disagrees with the trial court‟s analysis and instead posits a test that
would require granting the motion if the alleged statements were “contextually related” to
the public issue, even if the statements were defamatory per se, and even if they were
made outside the official meeting place.
We do not need to respond to the argument in detail because the entire discussion
of the arguments presented in that case was in the interpretation of the first issue, i.e.,
whether the act was in furtherance of a person‟s right of petition or free speech. (Briggs,
6
supra, 19 Cal.4th at pp. 1113-1114, interpreting section 425.16, subdivisions (b)(1) and
(e).) The court specifically noted it was not basing its decision on the issue of whether
the plaintiffs met their burden of demonstrating a probability that they would prevail on
their claims. (Briggs, at p. 1115, fn. 6.) The case is thus not applicable to the issues
presented here.
In addition, we note the trial court found in defendant‟s favor on the first portion
of the test. (§ 425.16, subd. (e).) Nothing in Briggs interprets the second portion of the
test.
In his respondent‟s brief, plaintiff cites Soukup v. Hafif, supra, 39 Cal.4th 260, in
support of the trial court‟s decision. In that case, our Supreme Court said: “To establish
a probability of prevailing, the plaintiff „must demonstrate that the complaint is both
legally sufficient and supported by a sufficient prima facie showing of facts to sustain a
favorable judgment if the evidence submitted by the plaintiff is credited.‟ [Citations.]
For purposes of this inquiry, „the trial court considers the pleadings and evidentiary
submissions of both the plaintiff and the defendant [citation]; though the court does not
weigh the credibility or comparative probative strength of competing evidence, it should
grant the motion if, as a matter of law, the defendant‟s evidence supporting the motion
defeats the plaintiff‟s attempt to establish evidentiary support for the claim.‟ [Citation.]
In making this assessment it is „the court‟s responsibility . . . to accept as true the
evidence favorable to the plaintiff . . . .‟ [Citation.] The plaintiff need only establish that
his or her claim has „minimal merit‟ [citation] to avoid being stricken as a SLAPP.
[Citation.]” (Id. at p. 291.) Applying this test, we agree with the trial court that the
7
defamation cause of action has “minimal merit.” Since it was therefore a potentially
meritorious cause of action, the trial court properly denied the special motion to strike.
V
THE ABSOLUTE PRIVILEGE DEFENSE
Civil Code section 47, subdivision (b) defines privileged publication to include a
publication made in “any (1) legislative proceeding, (2) judicial proceeding, (3) in any
other official proceeding authorized by law . . . .”2
Defendant urges that his statements to Beckman were related to the public issue.
Similarly, he argues that his statements to Duffey are protected by this privilege because
they were all made during defendant‟s conversation with Duffey, in which he asked
Duffey to sign a petition to remove plaintiff from office.
However, we agree with the trial court that Civil Code section 47, subdivision (b)
is inapplicable because the statements were not made in a legislative or judicial
proceeding, or “any other official proceeding authorized by law . . . .” “„[T]he privilege
applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by
litigants or other participants authorized by law; (3) to achieve the objects of the
litigation; and (4) that have some connection or logical relation to the action.‟” (Wise v.
Thrifty Payless, Inc. (2000) 83 Cal.App.4th 1296, 1302.) The statements were made to
Beckman and Duffey, persons not involved in any legislative or legal proceedings with
2 The exceptions to Civil Code section 47, subdivision (b)(1) are not relevant
here.
8
defendant. Accordingly, we find that the litigation privilege does not protect defendant
from a defamation action.
Civil Code section 47, subdivision (c) provides a privilege for “a communication,
without malice, to a person interested therein, (1) by [a person] who is also interested, or
(2) by one who stands in such a relation to the person interested as to afford a reasonable
ground for supposing the motive for the communication to be innocent, or (3) who is
requested by the person interested to give the information.” The balance of the
subdivision refers to information provided by a former employer about the job
performance of a person who is applying for a new job.
Plaintiff argues that Civil Code section 47, subdivision (c) is inapplicable because,
(1) the statements were not made without malice and (2) the statements were not made to
an interested party. Although not in the declarations, plaintiff argues that there was
ample evidence of malice. However, the trial court focused on the declarations.
Plaintiff points out that Beckman, although she was an administrative consultant to
PBID, was not an interested person. After the November 9, 2009, board meeting,
defendant called her and told her that plaintiff was a crook and had embezzled funds. He
also approached her in the parking lot after the November 2009 meeting and told her that
plaintiff was a crook who had embezzled funds. After these incidents, she refused to
have anything further to do with defendant. She certainly does not meet any definition of
an interested person.
Plaintiff also relies on the Duffey declaration. The trial court summarized the
declaration by stating that defendant had come to Duffey‟s business and asked him to
9
sign a petition. After Duffey told defendant that he was not interested, defendant told
Duffey that plaintiff was a crook. Duffey was also a private person who had no interest
in the controversy between defendant and plaintiff.
Defendant does not specifically discuss Civil Code section 47, subdivision (c) in
his brief. He thus fails to support his trial court argument and fails to demonstrate any
reason that his conduct is subject to the litigation privilege defense under Civil Code
section 47. We conclude that defendant‟s statements were not privileged because they
were not within the litigation privilege of section 47.
Accordingly, we agree with the trial court that plaintiff has shown a prima facie
case that he will prevail in his defamation action.
VI
DISPOSITION
The trial court‟s order denying the special motion to strike is affirmed. Plaintiff is
awarded his costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RICHLI
J.
We concur:
HOLLENHORST
Acting P. J.
KING
J.
10
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598 F.2d 609
Heppnerv.Califano
No. 78-6122
United States Court of Appeals, Second Circuit
2/15/79
1
W.D.N.Y.
VACATED AND REMANDED
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351 F.2d 564
Alan Lee BROWN, Petitioner-Appellant,v.WARDEN, U. S. PENITENTIARY, and United States of America, Respondents-Appellees.Alan Lee BROWN, Petitioner-Appellant,v.UNITED STATES of America, Respondent-Appellee.
No. 14987.
No. 15095.
United States Court of Appeals Seventh Circuit.
October 7, 1965.
1
William A. Wineberg, Jr., James W. Gladden, Jr., Chicago, Ill., for appellant.
2
Edward R. Phelps, U. S. Atty., Leon G. Scroggins, Asst. U. S. Atty., Springfield, Ill., Carl W. Feickert, U. S. Atty., Walter D. Williams, Asst. U. S. Atty., E. St. Louis, Ill., for appellees.
3
Before SCHNACKENBERG and KILEY, Circuit Judges, and GRUBB, District Judge.
4
GRUBB, District Judge.
5
These appeals are from orders denying post-conviction relief on petition for issuance of writ of habeas corpus and on motion under § 2255, Title 28 U.S.C.A., respectively.
6
Petitioner, an inmate of a United States correctional institution, was convicted on his plea of guilty to a violation of § 2312, Title 18 U.S.C.A., in the United States District Court for the Southern District of California on January 16, 1961. He waived right to counsel and was not represented by counsel in this underlying criminal proceeding. That court imposed a sentence of commitment of three years, suspended execution of this sentence, and placed petitioner on probation for a term of four years. Relief from this conviction by motion under § 2255 was denied by order dated March 30, 1964.
7
In February 1961, probation jurisdiction over petitioner was transferred to and accepted by the United States District Court for the Southern District of Illinois. In November 1962, a probation revocation hearing on charges of leaving the district and of gambling resulted in "reinstatement" of probation. Petitioner was not represented by counsel in this proceeding.
8
After petitioner's conviction of a charge of passing bad checks in Arkansas, on which he received a five-year suspended sentence, he was returned to federal custody, and the probation revocation proceedings challenged here were held on September 18, 1963.
9
The judgment and commitment order issued on the probation revocation hearing recites that petitioner appeared in court in person and without counsel; that he was advised of his constitutional right to counsel; that, on being asked whether he desired counsel assigned to him, he replied that he did not; and that the court found that petitioner knowingly and intelligently waived the right to counsel.
10
The transcript of this hearing does not reflect that petitioner was advised of the right to counsel, that he waived appointment of counsel, or that he requested counsel. At the hearing, the court initially imposed a sentence of commitment of four years and then corrected the term to three years in accordance with the requirements of § 3653, Title 18 U.S.C.A. This statute authorizes the court to require a probationer to serve the sentence originally imposed or any lesser sentence unless imposition of sentence was initially suspended. The transcript further reveals that petitioner did not deny or otherwise challenge the accusation concerning the violation of probation but called attention to his conduct in not participating in a jail break in Arkansas although he had an opportunity to escape.
11
The court which revoked probation and required petitioner to serve the sentence originally imposed denied an earlier application on motion under § 2255 on the ground that the judgment of conviction showed that he had waived appointment of counsel. The renewed motion under § 2255, presently on appeal, was denied by the Court without comment on the issue of denial of counsel.
12
The request for issuance of the writ of habeas corpus was grounded, inter alia, on an allegation of harassment in the prosecution of post-conviction remedies by petitioner's transfer to various correctional institutions. This petition was denied on the ground that petitioner had an adequate remedy under § 2255 of Title 28 U.S.C.A.
13
The basic issue presented by these consolidated appeals is concerned with the right to representation by counsel on proceedings for revocation of probation. For purposes of this decision, the Court assumes but does not decide that petitioner was not apprised of any right to counsel and did not specifically waive any right to appointment of counsel in the probation revocation proceedings.
14
An offender's rights under the Federal Probation Act have been construed in Burns v. United States, 287 U.S. 216, 53 S.Ct. 154, 77 L.Ed. 266 (1932), and in Escoe v. Zerbst, 295 U.S. 490, 55 S.Ct. 818, 79 L.Ed. 1566 (1935). The Act is intended to provide a period of grace in order to aid the rehabilitation of a penitent offender. Probation is conferred as a privilege and cannot be demanded as a matter of right. The offender stands convicted and faces punishment. The source of his rights under the Federal Probation Act lies in the legislative mandate, not in the Constitution of the United States.
15
Congress has declared that a probationer accused of violating his probation "shall be taken before the court for the district having jurisdiction over him." Section 3653, Title 18 U.S.C.A. Although no trial in any strict or formal sense is required, the legislative directive that the accused probationer shall be taken before a court means that —
16
"* * * there shall be an inquiry so fitted in its range to the needs of the occasion as to justify the conclusion that discretion has not been abused by the failure of the inquisitor to carry the probe deeper." Escoe v. Zerbst, 295 U.S., at 493, 55 S.Ct. at 820.
17
The inquiry of the court at such a hearing is not directed to the probationer's guilt or innocence in the underlying criminal prosecution, but to the truth of the accusation of a violation of probation. Has the probationer abused the privilege of the period of grace extended to him to aid him in rehabilitation?
18
Liberty on probation is conditioned on the observance of certain conduct. A breach of the required conduct — not necessarily the commission of a crime — constitutes a violation and serves to terminate the privilege of conditional liberty. Although revocation results in the deprivation of the probationer's liberty, the sentence he may be required to serve is the punishment for the crime of which he had previously been found guilty.
19
Thus it appears that under the Federal Probation Act as construed by the Supreme Court, the source and nature of the offender's rights and the issue before the court on hearing of revocation of probation differ from those on imposition of sentence in a criminal prosecution. It follows that an offender who has already been adjudged guilty and sentenced is not entitled to counsel as a matter of right under the Sixth Amendment of the Constitution of the United States or under Rule 44 of the Federal Rules of Criminal Procedure in the hearing on revocation wherein it is determined whether or not he has forfeited the privilege of conditional liberty. Welsh v. United States, 348 F.2d 885 (6th Cir. 1965); United States v. Huggins, 184 F.2d 866, 868 (7th Cir. 1950); Gillespie v. Hunter, 159 F.2d 410 (10th Cir. 1947); Bennett v. United States, 158 F.2d 412 (8th Cir. 1946). Decisions concerned with the constitutional right to counsel of an accused at various stages of criminal prosecutions are not controlling. Cf. Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L. Ed.2d 799 (1963); United States v. Tribote, 297 F.2d 598 (2d Cir. 1961).
20
A similar interpretation of corresponding state law is followed in Thomas v. Maxwell, 175 Ohio St. 233, 193 N.E.2d 150 (1963), and Kennedy v. Maxwell, 176 Ohio St. 215, 198 N.E.2d 658 (1964).
21
Recent decisions concerning the rights of parolees on revocation proceedings serve to emphasize the distinction between penological devices under legislative mandate, such as probation or parole where the guilt and liability to punishment of the offender are no longer in issue, and the initial criminal prosecution where these matters were determined. See Hyser v. Reed, 115 U.S.App.D.C. 254, 318 F.2d 225 (1963), and Richardson v. Markley, 339 F.2d 967 (7th Cir. 1965). It appears clearly from these decisions that the federal constitutional rights of an accused in a criminal prosecution and the rights of an offender in proceedings on revocation of conditional liberty under parole or probation are not coextensive.
22
The conclusion of the Supreme Court of Pennsylvania that there is a constitutional right to appointment of counsel in probation revocation proceedings rests on a differing concept as to the nature of the hearing. In Commonwealth of Pennsylvania ex rel. Remeriez v. Maroney, 415 Pa. 534, 204 A.2d 450, 451 (1964), the court characterizes the proceeding as a "sentencing" and as a "critical" stage in the proceedings against the "accused" wherein he has his last chance to present matters determining his freedom or imprisonment. This decision was applied as the law of Pennsylvania in invalidating a Pennsylvania revocation in United States ex rel. Harton v. Wilkins, 342 F. 2d 529 (2d Cir. 1965). The Remeriez decision is inconsistent with the interpretation of the source and nature of a probationer's rights under federal law as set forth in the decisions of the Supreme Court of the United States in the Burns and Escoe cases, supra. It is not persuasive authority for this court.
23
The decision of the Supreme Court of Alaska in Hoffman v. State, 404 P.2d 644 (1965), may be distinguished. There the court held that due process required appointment of counsel for an indigent to avoid discrimination on the ground of poverty where the state statute specifically provided for right to counsel on proceedings for revocation of probation.
24
The Federal Probation Act, as construed by the Supreme Court, does require that the probationer be afforded a fair hearing as a basis for the exercise of judicial discretion concerning the revocation. Petitioner has failed to show that the absence of representation by appointed counsel has affected the fairness of the revocation proceedings or resulted in an abuse of or lack of the exercise of judicial discretion.
25
Petitioner was no stranger to federal proceedings concerning criminals. He waived the right to counsel in the initial criminal prosecution. He did not request the appointment of counsel or the right to be represented by counsel of his own choosing in the probation revocation proceeding.
26
Petitioner was afforded a hearing by the court and did not deny the accusation of violation of probation. He asked for and was given the opportunity to present mitigating circumstances.
27
The Assistant United States Attorney in this case appeared in the role of an officer of the court, not as an adversary of the petitioner. He advised the court concerning the applicable provisions of the Federal Probation Act. The court thereafter required the petitioner to serve the sentence originally imposed.
28
The record in this case reveals that the range of the inquiry on proceedings for revocation of probation was so fitted to the needs of the occasion as to justify the conclusion that there has been no abuse of judicial discretion. The order denying the motion under § 2255, Title 28 U.S.C.A., in Appeal No. 15095 is hereby affirmed.
29
Petitioner at all times had an adequate remedy to seek collateral post-conviction relief by motion under § 2255, Title 28 U.S.C.A., as to the alleged grounds upon which relief is requested. This is his exclusive remedy. Hill v. United States, 368 U.S. 424, 82 S.Ct. 468, 7 L.Ed.2d 417 (1962). Resort may not be had to petition for issuance of writ of habeas corpus. Marchese v. United States, 304 F.2d 154 (9th Cir. 1962). The order denying the request for issuance of the writ in Appeal No. 14987 is affirmed.
30
The Court wishes to thank court-appointed counsel William A. Wineberg, Jr., and James W. Gladden, Jr., of the Chicago Bar for their able and diligent efforts on behalf of petitioner-appellant.
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F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JUL 1 1997
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
ROBERT LATTA,
Plaintiff - Appellant,
v. No. 96-2124
OFFICER JAMES A. KERYTE;
OFFICER LARRY MONTOYA;
SERGEANT EUGENE CATANACH;
LIEUTENANT GILBERT BACA;
OFFICER JEFF McDERMOTT; JOHN
DENCO, JR., New Mexico State
Police Chief; ANTHONY ORTEGA,
Valencia County Sheriff ; JOHN DOES,
one or more, in their official and
individual capacities; and BOARD OF
COUNTY COMMISSIONERS FOR THE
COUNTY OF VALENCIA,
Defendants - Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D. Ct. No. CIV-95-54-LCS/RLP)
Submitted on the briefs: *
*
After examining the briefs and the appellate record, this three-judge panel has
determined unanimously that oral argument would not be of material assistance in the
determination of this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The cause is
therefore ordered submitted without oral argument.
Susan M. Morrison, The Branch Law Firm, Albuquerque, New Mexico, for
Plaintiff-Appellant.
Jeffrey A. Dahl and Clayton E. Crowley, Lamb, Metzgar, Lines & Dahl,
Albuquerque, New Mexico, for Defendants-Appellees.
Before ANDERSON, TACHA, and BALDOCK, Circuit Judges.
TACHA, Circuit Judge.
Plaintiff Robert Latta filed this civil rights action pursuant to 42 U.S.C.
§ 1983 alleging violations of his Fourth and Fourteenth Amendment rights. Mr.
Latta appeals the Memorandum Opinion and Order of the magistrate judge
granting summary judgment in favor of the defendants on the basis of qualified
immunity. For the reasons set forth below, we affirm.
BACKGROUND
On October 30, 1993, the dispatcher at the Albuquerque State Police Office
informed Officer James Keryte that a possibly intoxicated driver was slumped
over the steering wheel of a white Pinto parked on the northbound shoulder of
Interstate 25 near the North Belen exit. Officer Keryte responded to the dispatch
and proceeded to the location. He identified the Pinto and parked his patrol car
25 to 30 feet behind the vehicle.
-2-
As Officer Keryte parked his patrol car, he made a number of observations.
Consistent with the dispatcher’s information, he noticed that the driver was
leaning over the steering wheel. Officer Keryte also observed that the driver was
looking at him using his rearview and outside mirrors. Officer Keryte noted that
the driver was fumbling with something underneath the seat. At this point,
Officer Keryte called the dispatcher and described his location and the license
number of the Pinto.
Officer Keryte exited his vehicle and approached the Pinto from the
passenger’s side. He noticed that the driver appeared unclean and that his clothes
were unkempt and dirty. Officer Keryte believed that the driver’s appearance
indicated that he had been on a drinking binge. As Officer Keryte approached the
Pinto, he asked the driver if he was okay. He also asked the driver to get out of
the car. Officer Keryte received no response to his questions.
Officer Keryte then approached the vehicle from the driver’s side. As he
made the approach, the driver locked his door and rolled up his window. Officer
Keryte again asked the driver if he was all right and if he would step out of the
car. As before, he received no reply. Officer Keryte asked for a driver’s license
and registration. The driver did not respond. Instead, the driver asked for Officer
Keryte’s identification. As Officer Keryte reached into his wallet to produce the
-3-
identification, the driver started his car and drove off. Officer Keryte yelled at
him to stop, but he continued driving.
Officer Keryte ran to his patrol car, informed the dispatcher about what had
happened, engaged his emergency equipment, and began pursuing the Pinto.
Using his radar, Officer Keryte determined that the man was traveling at an
average of 50 mph in a 65 mph zone.
After Officer Keryte caught up with the Pinto, he attempted to pass the car.
Each time, however, the driver swerved his car to prevent Officer Keryte from
passing. Officer Keryte became concerned that the driver would leave Interstate
25 and travel into a populated area where he might cause an accident. Officer
Keryte attempted to stop the car by twice bumping it from behind, but the driver
continued in a northerly direction.
Officer Keryte contacted his supervisor on duty, Sergeant Eugene Catanach,
to request permission to use other means to stop the driver. Officer Keryte
requested and received permission to shoot out the car’s tires.
Officer Keryte stopped his patrol car and retrieved a rifle from the trunk.
He rolled down the passenger side window and rested the gun on the window
frame of the passenger door. Officer Keryte then continued his pursuit,
eventually catching up with the Pinto.
-4-
As Officer Keryte pulled up to the Pinto, he shot the Pinto’s left rear tire,
which immediately went flat. Officer Keryte then backed off for a moment to see
if the car would stop. The driver, however, continued. Officer Keryte then shot
the Pinto’s left front tire. At some point, the barrel of Officer Keryte’s weapon
passed by the driver.
In the meantime, officers from the Valencia County Sheriff’s Department
and the Los Lunas Police Department constructed a two-car roadblock at the Los
Lunas Exit in order to stop the Pinto. The driver stopped his car about 40 to 50
feet from the roadblock.
Officer Keryte exited his patrol car and approached the Pinto from the
driver’s side with his weapon drawn. At the same time, the Valencia County and
Los Lunas officers approached the front of the vehicle with their weapons drawn.
Officer Keryte asked the man to get out of the Pinto but he did not comply.
Therefore, Officer Keryte knocked out the driver’s side window with the barrel of
his gun and unlocked the door. He attempted to remove the man from the Pinto,
but the man grabbed the steering wheel and resisted. Officer Keryte and two
other officers forcibly removed the man from the Pinto. The officers placed him
face down on the ground and restrained his hands and feet.
Officer Keryte retrieved the man’s driver’s license and contacted the
dispatcher. The dispatcher informed Officer Keryte that the Pinto was registered
-5-
to Margaret Brock. The dispatcher told Officer Keryte that the authorities had
contacted Ms. Brock. Ms. Brock explained that the man in the Pinto was her son,
Robert Latta, and that he suffered from paranoid schizophrenia.
After the officers restrained Mr. Latta, he apparently began
hyperventilating. Officer Keryte called an ambulance as a precaution. When the
ambulance arrived at the scene, one of the paramedics observed that Mr. Latta
suffered from swollen ankles and mild abrasions on his wrists and over his left
eye. The paramedic, however, did not consider the wrist and ankle restraints to
be tight.
With the officers’ help, the paramedics placed Mr. Latta on a gurney and
placed a soft cotton bandage on Mr. Latta’s wrists and ankles. The paramedics
then transported Mr. Latta to the University of New Mexico emergency room. He
was treated and then admitted to the University of New Mexico Mental Health
Unit for treatment and observation. Mr. Latta was never formally arrested.
Mr. Latta filed this suit pursuant to 42 U.S.C. § 1983 alleging violations of
his Fourth and Fourteenth Amendment rights. 1 He also brought several state law
1
In his complaint, Mr. Latta’s named “all defendants” in his Fourteenth
Amendment due process claim. R. at 115. On appeal, Mr. Latta argues that only Officer
Keryte violated his due process rights.
Mr. Latta also brought a § 1983 claim based on failure to train and supervise
against Officer Keryte, Officer Montoya, Sergeant Catanach, Lieutenant Baca, Officer
McDermott, and the unnamed John Does. This federal claim is not in issue on appeal.
-6-
claims. 2 The parties agreed to have a magistrate hear the case pursuant to 28
U.S.C. § 636(c)(1). The defendants moved for summary judgment on all of the
claims based on qualified immunity. On May, 17, 1996, the magistrate granted
the defendants’ motion for summary judgment with respect to the federal claims
but declined to address whether to exercise supplemental jurisdiction over the
state tort claims. The magistrate entered a final judgment with respect to the
federal claims under Federal Rule of Civil Procedure 54(b), and Mr. Latta filed a
timely notice of appeal. We exercise jurisdiction pursuant to 28 U.S.C. §§ 1291
and 636(c)(3). 3
DISCUSSION
I. S UMMARY J UDGMENT AND Q UALIFIED I MMUNITY S TANDARDS
In granting summary judgment in favor of the defendants, the magistrate
concluded that the defendants were entitled to qualified immunity on Mr. Latta’s
2
Mr. Latta brought state law claims based on (1) assault, (2) battery, (3) false
arrest, (4) false imprisonment, and (5) failure to train and supervise against Officer
Keryte, Officer Montoya, Sergeant Catanach, Lieutenant Baca, Officer McDermott, and
the unnamed John Does. Mr. Latta also brought a state law claim against Officer Keryte
for arrest without a warrant in violation of N.M. Stat. Ann. § 66-8-125. None of these
state law claims are in issue on appeal.
3
On June 25, 1996, we issued a show cause order instructing the parties to address
whether the magistrate’s order dismissing Mr. Latta’s federal claims was a final
appealable order. On July 1, 1996, the district court entered an order certifying the
dismissal order under Rule 54(b). The jurisdictional issue was referred to this panel on
September 13, 1996. We conclude that we have jurisdiction pursuant to Rule 54(b) and
28 U.S.C. § 1291.
-7-
Fourth and Fourteenth Amendment claims. We review the magistrate’s grant of
qualified immunity on summary judgment de novo, applying the same standard
used by the magistrate under Federal Rule of Civil Procedure 56(c). Romero v.
Fay, 45 F.3d 1472, 1475 (10th Cir. 1995). Summary judgment is appropriate only
“if the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c). In reviewing the record, “[w]e view the evidence
and draw any inferences therefrom in the light most favorable to the party
opposing summary judgment.” Coosewoon v. Meridian Oil Co., 25 F.3d 920, 929
(10th Cir. 1994).
A government official is entitled to qualified immunity from civil damages
when his “conduct does not violate clearly established statutory or constitutional
rights of which a reasonable person would have known.” Harlow v. Fitzgerald,
457 U.S. 800, 818 (1982). In analyzing a qualified immunity claim, we use a
two-part framework. “[F]irst we determine whether the plaintiff has asserted a
violation of a constitutional or statutory right, and then we decide whether that
right was clearly established such that a reasonable person in the defendant's
position would have known that [his or] her conduct violated the right.”
-8-
Garramone v. Romo, 94 F.3d 1446, 1449 (10th Cir. 1996) (citing Siegert v.
Gilley, 500 U.S. 226, 231 (1991)).
In this appeal, Mr. Latta asserts that the defendants violated his clearly
established Fourth Amendment rights to be free from an unlawful seizure
because: (1) Officer Keryte did not have reasonable suspicion to seize him during
the initial investigative stop, (2) the defendants did not have reasonable suspicion
or probable cause to seize him at the roadblock, and (3) the defendants used
excessive force in seizing him at the roadblock. Mr. Latta also argues that
Officer Keryte violated his clearly established Fourteenth Amendment due
process rights in pursuing him after he exercised his right to terminate the initial
encounter at the roadside. 4 As we discuss below, this case presents the classic
situation in which a plaintiff’s own actions in reaction to a legitimate law
enforcement encounter result in escalating volatility and danger justifying the
subsequent actions of the law enforcement officers involved. We therefore reject
4
Mr. Latta contends that the magistrate did not use the correct legal standards in
determining whether Officer Keryte had reasonable suspicion to detain Mr. Latta during
the initial encounter. Mr. Latta also asserts that the magistrate used the wrong standard in
evaluating Mr. Latta’s due process claim during the pursuit. Because we conclude that
Mr. Latta was not “seized” during the initial roadside encounter and that Officer Keryte
acted reasonably in pursuing Mr. Latta, we need not consider Mr. Latta’s challenge to the
legal standards employed by the magistrate. See Gallegos v. City of Colorado Springs, ---
F.3d ----, No. 96-1298, 1997 WL 280117, at *7 n.5 (10th Cir. May 28, 1997) (“[O]ur
determination that the stop of Mr. Gallegos was supported by a reasonable suspicion that
Mr. Gallegos was engaged in criminal activity renders irrelevant Mr. Gallegos’ challenge
to the legal standard employed by the trial court.”).
-9-
Mr. Latta’s contentions that the defendants violated his rights under the Fourth
and Fourteenth Amendments.
II. T HE F OURTH A MENDMENT C LAIMS
A. Introduction to the Fourth Amendment
The Fourth Amendment protects individuals against “unreasonable searches
and seizures.” U.S. C ONST . A MEND . IV. In determining whether a seizure
comports with the strictures of the Fourth Amendment, we have identified three
categories of police-citizen encounters: “(1) consensual encounters which do not
implicate the Fourth Amendment, (2) investigative detentions which are Fourth
Amendment seizures of limited scope and duration and must be supported by a
reasonable suspicion of criminal activity, and (3) arrests, the most intrusive of
Fourth Amendment seizures and reasonable only if supported by probable cause.”
United States v. Davis, 94 F.3d 1465, 1567-68 (10th Cir. 1996) (citations
omitted).
“[N]ot all police-citizen encounters implicate the Fourth Amendment.”
United States v. King, 990 F.2d 1552, 1556 (10th Cir. 1993). “[A] person has
been ‘seized’ within the meaning of the Fourth Amendment only if, in view of all
the circumstances surrounding the incident, a reasonable person would have
believed that he was not free to leave.” United States v. Mendenhall, 446 U.S.
544, 554 (1980). Thus, mere police questioning does not amount to a seizure
- 10 -
because “‘law enforcement officers do not violate the Fourth Amendment by
merely approaching an individual on the street or in another public place.’” King,
990 F.2d at 1556 (quoting Florida v. Bostick, 501 U.S. 429, 434 (1991)). Unless
the officer’s show of authority succeeds in restraining the person, the person has
not been “seized” within the meaning of the Fourth Amendment. Bella v.
Chamberlain, 24 F.3d 1251, 1256 (10th Cir. 1994).
When a police-citizen encounter rises to the level of a seizure, the seizure
must be supported by the requisite level of suspicion or probable cause. For
example, a police officer who observes suspicious circumstances may stop an
individual briefly to investigate the circumstances provoking suspicion. Terry v.
Ohio, 392 U.S. 1, 21 (1968). In analyzing whether such an investigative
detention complies with the Fourth Amendment, we must determine whether the
officer has reasonable suspicion to detain the individual. Id. Reasonable
suspicion “requires considerably less than proof of wrongdoing by a
preponderance of the evidence, but something more than an inchoate and
unparticularized suspicion or hunch.” United States v. Melendez-Garcia, 28 F.3d
1046, 1051 (10th Cir. 1994) (internal quotations omitted). The officer must be
“able to point to specific and articulable facts which, taken together with rational
inferences from those facts, reasonably warrant that intrusion.” Terry, 392 U.S. at
21.
- 11 -
In contrast to investigative detentions, formal arrests or seizures that
resemble formal arrests must be supported by probable cause. Michigan v.
Summers, 452 U.S. 692, 700 (1981). “Probable cause to arrest exists when
officers have knowledge of facts that would warrant a person of reasonable
caution in the belief that an offense has been or is being committed.” United
States v. Bruce, 78 F.3d 1506, 1508 (10th Cir.) (quotations omitted), cert. denied,
117 S. Ct. 149 (1996). In determining whether probable cause exists, we look to
the “circumstances as they would have appeared to a prudent, cautious, trained
police officer.” United States v. Morgan, 936 F.2d 1561, 1568 (10th Cir. 1991).
B. The “Seizure” of Mr. Latta
Mr. Latta asserts that the defendants violated his clearly established Fourth
Amendment rights by seizing him during the initial encounter and at the
roadblock. In reviewing this claim, we begin by determining when Mr. Latta was
“seized” within the meaning of the Fourth Amendment. Viewing the record in a
light most favorable to the plaintiff, we hold that Mr. Latta’s Fourth Amendment
rights were implicated neither during the initial encounter on the roadside nor
during the unsuccessful pursuit of Mr. Latta on the interstate. Instead, the record
shows that Mr. Latta was “seized” only when the defendants stopped him at the
roadblock.
- 12 -
Contrary to the parties’ assertions and the magistrate’s conclusion, Officer
Keryte’s initial interaction with Mr. Latta on the roadside was merely a
consensual encounter between a private citizen and a law enforcement officer
which did not implicate the Fourth Amendment. As we discussed above, a seizure
does not occur simply because a police officer approaches an individual, asks
questions, or requests identification. Bostick, 501 U.S. at 434. We recently
explained:
Without any basis for suspecting the criminal involvement of a
particular individual, police may communicate and ask questions of
that individual. . . . Courts have identified several factors that could
lead a reasonable innocent person to believe that he is not free to
disregard the police officer, including: the threatening presence of
several officers; the brandishing of a weapon by an officer; some
physical touching by an officer; use of aggressive language or tone of
voice indicating that compliance with an officer's request is
compulsory; prolonged retention of a person's personal effects such
as identification and plane or bus tickets; a request to accompany the
officer to the station; interaction in a nonpublic place or a small,
enclosed space; and absence of other members of the public.
United States v. Sanchez, 89 F.3d 715, 718 (10th Cir. 1996).
None of these factors is present in this case. Officer Keryte alone
encountered Mr. Latta on a public highway. As Officer Keryte approached the
car, he did not display a weapon or make any physical contact with Mr. Latta.
Instead, Officer Keryte inquired if Mr. Latta was okay and asked him to get out of
the car. When he received no response, Officer Keryte asked for a driver’s
license and registration. Instead of complying with Officer Keryte’s request, Mr.
- 13 -
Latta asked Officer Keryte for his identification. As Officer Keryte reached for
his wallet, Mr. Latta drove off. Viewing the record in a light most favorable to
the plaintiff, we conclude that, under the totality of the circumstances, Officer
Keryte’s conduct would not have communicated to a reasonable person that the
person was not free to leave or otherwise terminate the encounter. Mendenhall,
446 U.S. at 554. Thus, we hold Officer Keryte did not “seize” Mr. Latta within
the meaning of the Fourth Amendment during the initial roadside encounter.
We also hold that Officer Keryte’s unsuccessful pursuit of Mr. Latta on the
interstate was not a “seizure” within the meaning of the Fourth Amendment.
While the pursuit constituted an assertion of authority, the pursuit did not cause
Mr. Latta to submit to the authority or succeed in stopping him. Bella, 24 F.3d at
1256 (“[W]hen law enforcement officers shoot at a fleeing suspect, a ‘seizure’
occurs only if the shot strikes the fleeing person or if the shot causes the fleeing
person to submit to this show of authority.”). The record shows that Mr. Latta
stopped his car only when he approached the roadblock. Under such
circumstances, we hold that no seizure occurred during Officer Keryte’s pursuit
of Mr. Latta on the interstate. See California v. Hodari D., 499 U.S. 621, 628
(1991) (noting that in Brower v. Inyo County, 489 U.S. 593, 596 (1989), the
Court did not even consider the possibility that a seizure could have occurred
- 14 -
during the course of a twenty-mile chase that did not end until the decedent
crashed into a police-erected blockade).
After reviewing the record in a light most favorable to the plaintiff, we
hold that Mr. Latta was “seized” only when the defendants succeeded in stopping
him at the roadblock. Given this conclusion, we now address Mr. Latta’s
assertion that the defendants violated his clearly established Fourth Amendment
rights because this seizure was unreasonable. Mr. Latta argues that the
defendants lacked either reasonable suspicion or probable cause to seize him at
the roadblock. He also asserts that the defendants used excessive force in
detaining him at the roadblock.
C. The Reasonableness of the Roadblock Seizure
1. Probable Cause to Arrest
Mr. Latta argues that he was seized in violation of the Fourth Amendment
because the defendants did not have either reasonable suspicion or probable cause
to stop him. 5 Mr. Latta acknowledges that he was never formally arrested.
Nevertheless, in asserting that the defendants lacked probable cause, Mr. Latta
5
The magistrate did not discuss whether the seizure at the roadblock constituted
an investigative detention or an arrest. In determining that the seizure was lawful,
however, the magistrate stated that Officer Keryte “had an articulable and reasonable
suspicion that the Plaintiff was about to commit a crime.” Memorandum Opinion and
Order, at 7. Thus, the magistrate apparently concluded that the seizure at the roadblock
constituted an investigative detention.
- 15 -
apparently argues that the defendants’ conduct at the roadblock amounted to a de
facto arrest requiring probable cause. Because we find that the record clearly
shows that the defendants had probable cause to arrest Mr. Latta at the roadblock,
we need not decide whether the detention of Mr. Latta at the roadblock was an
investigative detention or a de facto arrest.
The incident at issue in this case began when Officer Keryte was informed
that a possibly intoxicated driver was slumped over the steering wheel of a white
Pinto parked on the northbound shoulder of Interstate 25. As Officer Keryte
approached the Pinto, he saw a man leaning over the steering wheel. Officer
Keryte thought the man was fumbling with something underneath the seat,
possibly to hide a bottle or something else he did not want Officer Keryte to see.
Officer Keryte noticed that the man’s clothes were unkempt and dirty. Officer
Keryte thought that the man’s appearance indicated that he had been drinking. As
Officer Keryte attempted to speak to the man, he rolled his window up, possibly
to hide the smell of alcohol. Officer Keryte then asked Mr. Latta a number of
questions, but he received no reply. Rather than cooperate with Officer Keryte’s
lawful investigation, however, Mr. Latta drove away without explanation.
Officer Keryte attempted to stop Mr. Latta by engaging his emergency
equipment. He also bumped the rear of Mr. Latta’s car to force him to stop. As
Mr. Latta continued to evade Officer Keryte, he demonstrated objective behavior
- 16 -
indicating possible intoxication. On two or three occasions, Mr. Latta swerved
his car to prevent Officer Keryte from passing him. By swerving, Mr. Latta
substantiated Officer Keryte’s suspicions that Mr. Latta had been driving while
intoxicated.
In sum, we hold that under totality of the circumstances—including the
facts surrounding the initial roadside encounter and Mr. Latta’s erratic driving
behavior—Officer Keryte had probable cause to arrest Mr. Latta at the roadblock
for driving while intoxicated under N.M. Stat. Ann. § 66-8-102. 6 Thus, we hold
that Officer Keryte did not violate Mr. Latta’s Fourth Amendment rights by
seizing him at the roadblock.
2. Excessive Force
Mr. Latta argues that the defendants violated his clearly established Fourth
Amendment rights because they used excessive force in detaining him at the
roadblock. In addressing an excessive force claim, we must ascertain whether the
arresting officer's actions were objectively reasonable. See Graham v. Connor,
490 U.S. 386, 397 (1989). In Graham, the Supreme Court explained:
[T]he “reasonableness” of a particular use of force must be judged
from the perspective of a reasonable officer on the scene, rather than
6
We note that Officer Keryte had probable cause to believe that Mr. Latta had
committed numerous other offenses. See, e.g., N.M. Stat. Ann. § 30-22-1 (resisting an
officer); § 30-22-21 (assaulting a police officer); § 66-8-113 (reckless driving); § 66-8-
114 (careless driving).
- 17 -
with the 20/20 vision of hindsight. . . . With respect to a claim of
excessive force . . . [n]ot every push or shove, even if it may later
seem unnecessary in the peace of a judge's chambers . . . violates the
Fourth Amendment. The calculus of reasonableness must embody
allowance for the fact that police officers are often forced to make
split-second judgments—in circumstances that are tense, uncertain,
and rapidly evolving—about the amount of force that is necessary in
a particular situation.
Id. at 396-97 (internal citations and quotations omitted). Relevant factors in
determining whether the force used by an arresting officer was objectively
reasonable include the severity of the crime, whether the subject posed an
immediate threat to the safety of the officer, and whether the subject was resisting
arrest. Wilson v. Meeks, 52 F.3d 1547, 1553 (10th Cir. 1995).
We hold that the defendants’ use of force at the roadblock was reasonable
under the totality of the circumstances. Although Mr. Latta was never formally
arrested for any crime, a reasonable officer at the time would have concluded that
Mr. Latta posed a danger to himself and other motorists. He was swerving on the
road, which caused the officers to believe that he was possibly intoxicated.
Officer Keryte attempted to stop Mr. Latta by using his emergency equipment,
bumping the car from behind, and shooting out his tires. After refusing to pull
over, Mr. Latta finally stopped at the roadblock. The officers, not knowing
whether Mr. Latta was armed, had their weapons drawn as they approached the
vehicle. Mr. Latta still refused to get out of the car. Officer Keryte broke the
window of the car to unlock the door. Mr. Latta grabbed the steering wheel and
- 18 -
resisted the officers as they tried to remove him from the car. When the officers
finally removed him from the vehicle, they cuffed his hands and legs and placed
him on the ground. Later, when the officers suspected that Mr. Latta was
hyperventilating, they called an ambulance. As soon as the officers learned that
Mr. Latta suffered from mental problems, they released him into the custody of
the medical personnel. Under such circumstances, we conclude that the
defendants’ behavior was objectively reasonable. Thus, we hold that the
defendants did not use excessive force in detaining Mr. Latta at the roadblock in
violation of the Fourth Amendment.
III. F OURTEENTH A MENDMENT C LAIM
Mr. Latta argues that Officer Keryte violated his clearly established
Fourteenth Amendment substantive due process rights by using excessive force
during the pursuit. See Bella 24 F.3d at 1257. As in Bella, “[w]ithout deciding
the issue, we assume that excessive force claims arising outside the context of a
seizure still may be analyzed under substantive due process principles.” Id.
The Fourteenth Amendment Due Process Clause protects citizens from
governmental deprivation of life, liberty and property without due process of law.
“Under the due process standard, the factors relevant to whether the use of force
is excessive are: (1) the relationship between the amount of force used and the
need presented; (2) the extent of the injury inflicted; and (3) the motives of the . .
- 19 -
. officer.” Hannula v. City of Lakewood, 907 F.2d 129, 131-32 (10th Cir. 1990).
Force inspired by malice or by “unwise, excessive zeal amounting to an abuse of
official power that shocks the conscience . . . may be redressed under [the
Fourteenth Amendment].” Hewitt v. City of Truth or Consequences, 758 F.2d
1375, 1379 (10th Cir. 1985). In this case, the evidence, viewed in a light most
favorable to Mr. Latta, “fail[s] to meet this high threshold.” Bella, 24 F.3d at
1257.
First, Officer Keryte’s use of force during the pursuit was not unreasonable
given the need presented. Faced with a possibly intoxicated driver, Officer
Keryte attempted to stop Mr. Latta by engaging his emergency equipment. When
that failed, Officer Keryte tried bumping Mr. Latta from behind to get him to pull
over. Officer Keryte tried to pass Mr. Latta, but Mr. Latta swerved his car to
prevent the patrol car from passing. Officer Keryte, concerned that a possibly
intoxicated driver would injure himself or others, contacted his supervisor to get
permission to shoot out the tires. Although Officer Keryte used potentially deadly
force in order to stop Mr. Latta, the force was not grossly disproportionate to the
need presented.
Second, the extent of Mr. Latta’s injury was minimal. Mr. Latta admits that
Officer’s actions during the pursuit did not cause him any physical injury. App’t.
- 20 -
Brief, at 48. 7 As we stated in Bella: “[W]e have never upheld an excessive force
claim without some evidence of physical injury.” Bella, 24 F.3d at 1257 (citing
cases).
Finally, the record does not demonstrate that Officer Keryte acted with any
improper motive or malice. Indeed, as in Bella, 24 F.3d at 1258, Mr. Latta
apparently concedes that Officer Keryte was not inspired by malice. Instead, he
contends that Officer Keryte acted with excessive zeal amounting to an abuse of
official power that shocks the conscience. As we discussed above, however, the
record indicates that Officer Keryte’s actions were objectively reasonable under
the totality of the circumstances. We therefore conclude that the magistrate did
not err in concluding that Officer Keryte was entitled to qualified immunity on
Mr. Latta’s substantive due process claim.
CONCLUSION
For the foregoing reasons, we hold that Mr. Latta has failed to establish
that the defendants violated his Fourth or Fourteenth Amendment rights. We
therefore AFFIRM the magistrate’s Memorandum Opinion and Order granting the
defendants’ motion for summary judgment on Mr. Latta’s Fourth and Fourteenth
Amendment claims.
7
Mr. Latta acknowledges that his physical injuries (some mild abrasions and
swollen ankles) occurred when the defendants detained him at the roadblock and not
during Officer Keryte’s pursuit.
- 21 -
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FILED
NOT FOR PUBLICATION JAN 25 2017
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 15-50385
Plaintiff-Appellee, D.C. No. 3:15-cr-00484-BEN
v.
MEMORANDUM*
JAIME BECERRA-PULIDO,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of California
Roger T. Benitez, District Judge, Presiding
Submitted January 18, 2017**
Before: TROTT, TASHIMA, and CALLAHAN, Circuit Judges.
Jaime Becerra-Pulido appeals from the district court’s judgment and
challenges the 60-month sentence imposed following his guilty-plea conviction for
possession of methamphetamine with intent to distribute, in violation of 21 U.S.C.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
§ 841(a)(1). We have jurisdiction under 28 U.S.C. § 1291, and we vacate and
remand.
Becerra-Pulido contends that the district court erred in denying a minor role
reduction to his base offense level under U.S.S.C. § 3B1.2(b). After Becerra-
Pulido was sentenced, the United States Sentencing Commission issued
Amendment 794 (“the Amendment”), which amended the commentary to the
minor role Guideline. The Amendment is retroactive to cases pending on direct
appeal. See United States v. Quintero-Leyva, 823 F.3d 519, 523 (9th Cir. 2016).
The Amendment clarified that, in assessing whether a defendant should
receive a minor role adjustment, the court should compare him to the other
participants in the crime, rather than to a hypothetical average participant. See
U.S.S.G. App. C Amend. 794; Quintero-Leyva, 823 F.3d at 523. In addition, the
Amendment clarified that “[t]he fact that a defendant performs an essential or
indispensable role in the criminal activity is not determinative.” U.S.S.G. § 3B1.2
cmt. n.3(C) (2015). Finally, the Amendment added a non-exhaustive list of factors
that a court “should consider” in determining whether to apply a minor role
reduction. See id. Because we cannot determine from the record whether the
district court followed the guidance of the Amendment’s clarifying language and
considered all of the now-relevant factors, we vacate Becerra-Pulido’s sentence
2 15-50385
and remand for resentencing under the Amendment. See Quintero-Leyva, 823 F.3d
at 523-24.
VACATED and REMANDED for resentencing.
3 15-50385
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154 Wis.2d 320 (1990)
453 N.W.2d 628
STATE of Wisconsin, Plaintiff-Respondent,[]
v.
Richard L. WEBB, Defendant-Appellant.[]
No. 89-0593-CR.
Court of Appeals of Wisconsin.
Submitted on briefs September 11, 1989.
Decided January 11, 1990.
*322 For the defendant-appellant the cause was submitted on the briefs of Glenn L. Cushing, assistant state public defender.
For the plaintiff-respondent the cause was submitted on the briefs Donald J. Hanaway, attorney general, and Daniel J. O'Brien, assistant attorney general.
Before Eich, C.J., Gartzke, P.J., and Sundby, J.
GARTZKE, P.J.
Richard Webb appeals from a judgment of conviction for first-degree sexual assault. Sec. 940.225(1)(d), Stats. 1985. The victim is Webb's eleven-year-old stepdaughter. The dispositive issue is whether Webb's sixth amendment right[1] to a public trial was violated when this preliminary hearing was closed to the public except for two of the victim's "support persons." *323 We conclude that the trial court erred, the error was not harmless, and the conviction must be reversed, subject to reinstatement if defendant does not request a second preliminary or if a second properly conducted preliminary results in findings justifying a bindover for trial.
The purpose of a preliminary hearing is to determine whether there is probable cause to believe the defendant has committed a felony. Sec. 970.03(1), Stats. If the court finds that such probable cause exists, it must bind the defendant over for trial. The court made that finding at defendant's preliminary. He was bound over for trial, tried, and convicted. But at the prosecutor's request and over defendant's objection, defendant's preliminary hearing was closed to the general public except for the victim's mother and a member of the local rapecrisis unit. The court excluded defendant's mother and niece.
[1]
Because the facts are undisputed, whether defendant's sixth amendment right to a public trial was violated by the closure order is a question of law which we decide without deference to the trial court's decision. Stevens v. Manitowoc Cir. Ct., 141 Wis. 2d 239, 244, 414 N.W.2d 832, 834 (1987).
Relying on Stevens, defendant argues that the trial court erred by excluding the general public and his mother and niece from the preliminary examination under sec. 970.03(4), Stats., which provides:
If the defendant is accused of a crime under s. 940.225 [sexual assault] . . ., the judge shall, at the request of the complaining witness, exclude from the [preliminary] hearing all persons not officers of the court, members of the witness's or defendant's families or others deemed by the court to be supportive of *324 them, or otherwise required to attend. The judge may exclude all such persons from the hearing in any case where the defendant is accused of a crime under s. 940.225 . . . or a crime against chastity, morality or decency.
The Stevens court held that "a qualified sixth amendment public trial right" applies to preliminary hearings and "must adhere when closure is sought by the complainant under sec. 970.03(4), Stats." Stevens, 141 Wis. 2d at 248-49, 414 N.W.2d at 836. The court said:
[T]he portion of sec. 970.03(4), Stats., which mandates closure of sexual assault preliminary examinations solely upon the request of the complaining witness, does not comport with defendant's public trial right if the defendant objects to closure. We [conclude], however, that the remaining discretionary exclusion provision of sec. 970.03(4) together with the circuit court finding requirements established in Waller [v. Georgia, 467 U.S. 39, 48 (1984)], and Press-Enterprise [Co. v. Superior Court, 478 U.S. 1, 13-14 (1986) (Press-Enterprise II)], sufficiently protects the defendant's public trial right. It provides for sufficient balancing of the parties' interests, as well as upholding the laudable purpose of sec. 970.03(4) in protecting victims of sexual assault from undue emotional pressure or harassment. We therefore adopt and imply the inclusion of the factors established in those cases to create a reasonable basis upon which the discretionary closure provision of the statute is sustained.
Id. at 253-54, 414 N.W.2d at 838.[2]
*325 The Waller Court held:
[T]he party seeking to close the hearing must advance an overriding interest that is likely to be prejudiced, the closure must be no broader than necessary to protect that interest, the trial court must consider reasonable alternatives to closing the proceeding, and it must make findings adequate to support the closure.
Waller, 467 U.S. at 48. The Press-Enterprises II Court said that since a qualified first amendment right of access applies to preliminary hearings in California, such
proceedings cannot be closed unless specific, on the record findings are made demonstrating that "closure is essential to preserve higher values and is narrowly tailored to serve that interest." If the interest asserted is the right of the accused to a fair trial, the preliminary hearing shall be closed only if specific findings are made demonstrating that, first, there is a substantial probability that the defendant's right to a fair trial will be prejudiced by publicity that closure would prevent and, second, reasonable alternatives to closure cannot adequately protect the defendant's fair trial rights.
Press-Enterprise II, 478 U.S. at 13-14 (citations omitted).
[2]
We conclude on the basis of Stevens that the qualified constitutional right to a public trial, as applied to a preliminary hearing in this state, is satisfied only if both of two conditions exist. First, closure must comply with *326 sec. 970.03(4), Stats. Second, the trial court must make the findings required by Waller and Press-Enterprise II.
[3]
The closure order in the case before us does not comply with sec. 970.03(4), Stats. Because the prosecutor requested closure, the second sentence of the statute applies. The words "all such persons" in the second sentence of the statute can only refer to the class described in the first sentence: "all persons not officers of the court, members of the witness's or defendant's families or others deemed by the court to be supportive of them." [Emphasis added.] The meaning of the first sentence, and therefore of the second as well, is that the court cannot exclude from the hearing officers of the court, members of the witness's or defendant's families, or others deemed by the court to be supportive of the witness or the defendant. The trial court wrongly excluded at least one member of defendant's family, his mother.
Because the trial court's closure order violates sec. 970.03(4), Stats., defendant's qualified constitutional right was violated. Stevens, 141 Wis. 2d at 248-49, 419 N.W.2d at 836. We need not decide whether the court's findings meet the requirements established in Waller and Press-Enterprise II.
[4]
Defendant's qualified right to a public preliminary examination having been violated, he is entitled to relief. The federal view is that a defendant need not prove specific prejudice to obtain relief for a violation of the public-trial guarantee. Waller, 467 U.S. at 49 & n.9. In other words, the violation can never be harmless error.
[5]
The remaining question is defendant's remedy. While a defendant need not prove specific prejudice stemming from violation of the public-trial guarantee, *327 the remedy must be appropriate to the violation. Id. at 49-50. In Waller, the public-trial guarantee was violated at a suppression hearing. The Waller Court remanded the case for a new, public suppression hearing, and for a new trial only if the results of that hearing differed substantially from the results of the improperly conducted hearing. Id. at 50.
[6]
In this case, the constitutional violation occurred at a preliminary hearing. A defendant is entitled to appellate review of the validity of the bindover for trial even after trial and conviction. State v. Olson, 75 Wis. 2d 575, 584, 250 N.W.2d 12, 17 (1977); State v. Sorenson, 135 Wis. 2d 468, 471, 400 N.W.2d 508, 510 (Ct. App. 1986), rev'd on other grounds, 143 Wis. 2d 226, 421 N.W.2d 77 (1988); State ex rel. McCaffrey v. Shanks, 124 Wis. 2d 216, 224, 369 N.W.2d 743, 748 (Ct. App. 1985).
[7]
However, an unqualified reversal is inappropriate in this case in view of the remedy the Waller Court granted for violation of the right to a public trial in a suppression hearing. By analogy to the Waller remedy, we reverse the judgment of conviction and remand to the trial court to conduct a second preliminary hearing, if the defendant so requests. The hearing must satisfy the qualified constitutional right to a public trial and otherwise comply with the law. If the evidence at that hearing satisfies the court that probable cause exists to believe a felony was committed by the defendant, then the judgment of conviction should be reinstated. The judgment should also be reinstated if defendant fails within 21 days after remittitur to request a second preliminary hearing.
By the Court.Judgment reversed and cause remanded for further proceedings consistent with this opinion.
*328 EICH, C.J.(dissenting).
I respectfully record my dissent from the majority opinion in this case because I believe sec. 970.03(4), Stats., was complied with and, further, that the trial court exercised its discretion to exclude the two spectators in conformity with the requirements of Stevens v. Manitowoc Cir. Ct., 141 Wis. 2d 239, 414 N.W.2d 832 (1987), and related cases. I would affirm the conviction.
The majority concludes that the trial court erred in excluding the general public and Webb's "support people" his mother and his niecefrom the preliminary examination under the authority of sec. 970.03(4), Stats. That section provides as follows:
If the defendant is accused of a crime under s. 940.225 . . . the judge shall, at the request of the complaining witness, exclude from the hearing all persons not officers of the court, members of the witness's or defendant's families or others deemed by the court to be supportive of them . . . . The judge may exclude all such persons from the hearing in any case where the defendant is accused of a crime under s. 940.225 . . . . [Emphasis added.]
Webb and the majority read the phrase "all such persons" as applying only to persons who are not "officers of the court, members of the witness's or defendant's families or others deemed . . . to be supportive of them." In my view, having "all such persons" apply only to persons who are not court officers, family members or supporters of the principal parties reads an irreconcilable conflict into the statute. If the trial court can never exclude officers, family members or supporters under any circumstances, and if the last sentence applies only to those persons not in those categories, the first sentence would mandate exclusion of all those who are not officers, friends or supporters ("the judge shall . . . *329 exclude"); while the second sentence makes the same decision discretionary: "The judge may exclude all such persons . . . ."
Recognizing the rule that statutes should be construed to avoid irreconcilable conflicts or absurd results, Thelen v. DHSS, 143 Wis. 2d 574, 579, 422 N.W.2d 146, 148 (Ct. App. 1988), I read "all such persons" in sec. 970.03(4), Stats., as referring to those affirmatively, rather than negatively, named immediately before; that is, "officers of the court, members of the witness's or defendant's families or others . . . supportive of them. . . ." Thus, in my view, the statute's first sentence requires the court, on proper request, to exclude all those who are "not" in those named categories; and the second sentence gives the court discretion to exclude those who are. Any such discretionary exclusion, of course, must meet a constitutional test as well.
In Stevens, the court, overruling past cases, held for the first time that "a qualified sixth amendment public trial right" applies to preliminary hearings and "must adhere when closure is sought by the complainant under sec. 970.03(4), Stats." Stevens, 141 Wis. 2d at 248-49, 414 N.W.2d at 836. The court outlined the procedure which must be followed before a hearing may be closed. It is a balancing test similar to that discussed by the United States Supreme Court in Waller v. Georgia, 467 U.S. 39 (1984), and Press-Enterprise Co. v. Superior Court, 478 U.S. 1 (1986) (Press-Enterprise II). First, the state must advance a compelling interest which would be prejudiced absent closure, such as the need to protect a sexual assault victim from undue embarrassment and emotional trauma. Second, the court must narrowly tailor its order and consider reasonable alternatives to full closure. Third, the court must articulate specific findings adequate to support closure, such as the "victim's age, *330 psychological maturity and understanding, the nature of the crime, and the desires of the victim and the victim's family. . . ." Finally, the court should give great but not exclusive weight to the desires of the victim since that is "clearly shown to be proper public policy as evidenced by the enactment of sec. 970.03(4)." Stevens, 141 Wis. 2d at 254, 414 N.W.2d at 838-39.
I believe the trial court properly exercised its discretion in this case. First, the charged crime was of a most sensitive naturesexual assault by a stepfather on his stepchild. It is difficult to conceive of a crime more likely to cause emotional stress and possible trauma to a child witness than sexual assault by a parent. Second, the court articulated on the record why it excluded the defendant's relatives from the hearing. The court asked the defendant's attorney "[w]hat is the relationship, if any, that exists between the two people who are present and the victim in this case?" Upon learning that they were the defendant's mother and nieceand thus also relatives of the victimthe court stated that given the "fact that these people are people who she [the victim] is familiar with as being associated with the defendant in this case, I will grant the motion and will ask that these two individuals will be excluded from the courtroom as well."
The court made additional findings in support of its order. The court asked the prosecutor how old the complainant was and found that "[u]pon the representation of [the prosecutor] that the request is being made at the request of the alleged victim, and given the age of the victim [twelve] . . . I will grant the motion. . . ." The court emphasized that, "If we were dealing here with an adult victim, then my determination would be other than it has." *331 It thus appears that the court grounded its closure order on: (1) the victim's age and the nature of the crime; (2) the fact that the request for closure came from the prosecution on the victim's behalf; and (3) the fact that the persons excluded were relatives of the defendant, the victim's stepfather, and were thus familiar to herwhich, implicitly, at least, amounts to a finding that their presence in court would be embarrassing or traumatic to the victim.
Finally, I believe the order was sufficiently narrowly tailored to meet the state's (and the victim's) desire to avoid the embarrassment and trauma attendant upon a hearing of this nature, without unduly burdening Webb's right to a public trial. First, I note that the hearing transcript remained part of the public record; it was neither sealed nor otherwise restricted. Second, it appears that Webb's objection to the order was not that it closed the proceedings to the public, but only that it did not permit his mother and niece to remain in the courtroom. After the district attorney's initial request "to clear and close the courtroom," defense counsel stated: "That's fine with me, your Honor. If they're not going to have any support people in here, that's fine." Then, when the prosecutor stated he wished to have the victim's mother and the rape counselor present, defense counsel took the position that, under the statute, "[e]ither [the court] excludes all or he excludes none, except for . . . the support people" for both the victim and the defendant.
Under the statute, exclusion of spectators including "support persons"is discretionary with the trial court. In light of the circumstances discussed above, including the familial relationships between the defendant, the victim and the defendant's relatives, I believe the trial court's explanation of its *332 decision, while unfortunately sketchy, is minimally adequate under Stevens.
NOTES
[] Petition to review and cross review pending. This petition was not disposed of at the time the volume went to press. Its disposition will be reported in a later volume.
[1] The sixth amendment to the United States Constitution provides that "[i]n all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial." This "public trial" right is reinforced in Wisconsin by sec. 757.14, Stats., which states that "[t]he sittings of every court shall be public and every citizen may freely attend the same, except if otherwise expressly provided by law."
[2] The dissent's reading of sec. 970.03(4), Stats., conflicts with the Stevens court's discussion quoted above. The statute has both a mandatory provision and a discretionary provision. The former applies when a witness complains in a sexual assault case. The latter applies when a nonwitness complains in a sexual assault case, or when a witness or nonwitness complains in a case involving a crime against chastity, morality, or decency. The provisions are not redundant.
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601 S.W.2d 527 (1980)
QUEEN CITY LAND COMPANY, A Texas Corporation, Appellant,
v.
The STATE of Texas et al., Appellees.
No. 13089.
Court of Civil Appeals of Texas, Austin.
June 11, 1980.
Rehearing Denied July 9, 1980.
*528 Thomas H. Lear, Greg Gossett, Logan, Lear, Gossett & Harrison, San Angelo, for appellant.
William R. Moore, County Atty., Robert R. Sykes, Asst. County Atty., San Angelo, for appellees.
SHANNON, Justice.
Appellees, the State of Texas and Tom Green County, initiated eminent domain proceedings in the county court at law of Tom Green County to acquire an easement in and to twenty-one acres of land out of a larger tract owned by appellant Queen City Land Company and situated in Tom Green County. The acquisition of the easement was made necessary by reason of a highway construction project planned by the State. Appellees' petition in condemnation provided that access from the remaining property of the condemnee to the proposed highway to be built would be permitted.
After a jury trial, the county court entered judgment vesting fee simple title to the tract in appellees and awarding appellant $282.00 in addition to the commissioner's award of $170,000.00 that appellant had drawn down previously from the registry of the court. The judgment was silent with respect to appellant's right of access from its remaining lands to the highway.
Appellant's first point is that the court erred in vesting fee simple title in appellees. The petition in condemnation sought only an easement in and to the tract, not fee simple title. The relief afforded the court in an eminent domain proceeding, as in any other lawsuit, must be such and only such as is warranted by the pleadings. City of Floyada v. Gilliam, 111 S.W.2d 761 (Tex. Civ.App. 1937, no writ). No contention is made in response to the point that the matter of fee simple title was tried by consent. Point of error one is sustained.
Point of error two urges that the court erred in not saving and excepting from the judgment the oil, gas, and other minerals under the right-of-way previously owned by appellant. Appellees agree that the judgment is erroneous in this regard. Point of error two is sustained.
*529 Appellant claims by its third point of error that the judgment should have provided that appellant's remaining lands would have access to the highway. Appellees' petition in condemnation specifically provided that "Access from remaining property to proposed highway facility will be permitted."
Texas Rev.Civ.Stat.Ann. art. 6674w-1 (1977) addresses the rights of abutting landowners to access to new highways whether constructed over previous highway rights-of-way or over new ones. State v. Meyer, 403 S.W.2d 366 (Tex. 1966). Article 6674w-1 recognizes preexisting access as a compensable item of damages and authorizes the Highway Commission, within its discretion, to grant access to abutting lands which theretofore had no access to such controlled access highway. State v. Meyer, supra.
Appellees' petition disclaimed any intent by appellees to condemn access to the remaining lands to the highway. Right of access as allowed by Tex.Rev.Civ.Stat.Ann. art. 6674w-1 (1977) remained in appellant. Appellees agree that appellant was entitled to such a recitation in the judgment. Point of error three is sustained.
Point of error four raises the general question of jury misconduct. "The court erred in overruling the defendant's motion for new trial based upon jury misconduct as set out in defendant's motion for new trial." Reference to the motion for new trial reveals the following: "Appellant says that there was jury misconduct in the deliberations following the trial of said cause as is more particularly set out in the affidavits of the jurors...." Point of error four hardly complies with Tex.R.Civ.P. 418 in that the point does not "... direct the attention of the court to the error relied upon ...." Nevertheless, this Court has examined the statement and argument in the brief in an effort to determine the question of reversible error. Fambrough v. Wagley, 169 S.W.2d 478 (Tex. 1943).
Appellant's evidence at the motion for new trial was that one group of jurors espoused the valuation figure sponsored by appellees' witnesses. Another juror, Debra Stark McLucas, held out for a figure considerably higher. The difference between the two points of view was resolved by adding the two figures together and dividing by two. There was no evidence that there was an agreement in advance between the jurors to be bound by the figure so obtained.
There was further evidence taken at the motion for new trial explaining the process by which the jury, with the aid of a calculator, arrived at the market value of the tract condemned by appellee, considered as severed land.
Appellant, of course, had the burden to establish that jury misconduct occurred. Watson v. Texas Indemnity Insurance Co., 210 S.W.2d 989 (Tex. 1948); Tex.R.Civ.P. 327. After careful consideration, this Court has concluded that appellant failed to establish jury misconduct.
The answers of the jury were plainly the result of a compromise between the opposing views of Debra Stark McLucas and the other jurors. Proof that the verdict of the jury was obtained by compromise does not constitute proof of misconduct. Owens v. Missouri Pac. Ry. Co., 4 S.W. 593 (Tex. 1887); Dickey v. Travelers Insurance Company, 356 S.W.2d 156 (Tex. Civ.App. 1962, writ ref'd n.r.e.). "Compromise is the way intelligent men adjust their differences." Patterson v. Hughes, 227 S.W.2d 397 (Tex.Civ.App. 1950, no writ).
Appellant does not, and could not, urge that the jury rendered a quotient verdict. A "quotient verdict" is one in which the jurors agree to be bound by a figure determined by adding the sums they individually think proper and dividing that total by the number of jurors. Landreth v. Reed, 570 S.W.2d 486 (Tex.Civ.App. 1978, no writ); 3 McDonald, Texas Civil Practice, Sec. 14.13, p. 568 (Revised, 1970).
If it may be conceded that the jury's verdict was based upon illogical reasons, that, without more, does not constitute jury misconduct. In the absence of overt acts of misconduct, it is not permissible to probe *530 the minds of the jurors or supervise their process of reasoning. Akers v. Epperson, 171 S.W.2d 483 (Tex. 1943).
The use by the jury of a slide rule, Solana v. Hill, 348 S.W.2d 481 (Tex.Civ.App. 1961, writ ref'd n.r.e.), or a calculator, Bobbie Brooks, Inc. v. Goldstein, 567 S.W.2d 902 (Tex.Civ.App. 1978, writ ref'd n.r.e.), is not misconduct. Point of error four is overruled.
In point of error five, appellant contends that certain jury argument of appellees' counsel was improper. Appellant suggests four instances of alleged improper argument, the strongest being: "... I don't blame Mr. Eschman [appellant's president] for trying to get all he can. I certainly resent it, but I don't blame him and I, you know, have some question about it. I don't know. You may refer to it as ... oh, you may refer to it as greed or something of that nature, but what I am trying to get across is that we want to pay him the fair market value."
Counsel neither objected to the arguments nor asked the court to give an instruction to the jury to disregard the arguments.
Appellant has not shown to this Court nor has this Court discovered, cases condemning the specific argument of counsel. This Court recognizes, of course, that counsel is permitted latitude in discussing the facts and issues. Among other things, counsel may comment upon the bias or interests of the parties and witnesses. Ramirez v. Acker, 138 S.W.2d 1054 (Tex. 1940). Nonetheless, counsel is not permitted to indulge in inflammatory language in order to influence the jurors to return a verdict favorable to his client. Ramirez v. Acker, supra. "Greed" is a harsh word meaning an acquisitive desire beyond reason. "Greedy" is synonymous with insatiable, gluttonous, devouring, or grasping. The term "greed" is not to be used lightly when applied to the motives or conduct of others. In our opinion, counsel's use of the term was improper. Nevertheless, it is this Court's view that the argument was curable by instruction, Standard Fire Ins. Co. v. Reese, 584 S.W.2d 835 (Tex. 1979), and that appellant, by failing to object and press for an instruction at the time of argument, waived its complaint. Turner v. Turner, 385 S.W.2d 230 (Tex. 1964); Maston v. Texas Employer's Insurance Ass'n, 331 S.W.2d 907 (Tex. 1960).
Appellant's final point claims that the trial court erred in admitting value testimony of two witnesses because the comparable sales employed by those witnesses were so dissimilar to the 21.01-acre tract so as to have no probative force or value. Accordingly, appellant urges that there was no evidence to support the jury's verdict.
Underlying appellant's complaint is its contention that the 21.01-acre tract is a self-sufficient economic unit independent of the tract from which it was carved. Accordingly, appellant argues, the court erred in allowing the State's witnesses to testify to sales of much larger tracts.
By admitting the testimony of the State's witnesses, the trial court must have concluded that appellant's tract was not a self-sufficient economic unit, independent of the parent tract, and, as a result, its value should be ascertained by valuing the 21.01-acre tract as a part of the whole.
The trial court is afforded broad discretion in determining whether sales offered in evidence are comparable to the land being taken. The trial court's determination that a prior sale is sufficiently similar to be considered comparable cannot be reviewed except to determine whether there has been an abuse of discretion. Trinity River Authority v. Hutchings, 437 S.W.2d 383 (Tex.Civ.App. 1969, no writ); Crouch v. State, 413 S.W.2d 141 (Tex.Civ. App. 1967, no writ). This Court has considered the sales that were admitted into evidence and has concluded that the trial court did not abuse its discretion in the admission of the evidence. The sales were not so dissimilar so as to render them inadmissible as a matter of law. Trinity River Authority v. Hutchings, supra.
The judgment is reformed to provide that only an easement for highway purposes is *531 condemned and taken; that all oil, gas, and minerals previously owned by appellant are saved and excepted from the judgment; and that access from appellant's remaining property to the highway facility will be permitted as provided by Art. 6674w-1 and regulations promulgated thereunder. In all other respects, the judgment is affirmed.
Reformed, and as Reformed, Affirmed.
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45 F.2d 103 (1930)
YOUNGS RUBBER CORPORATION, Inc.,
v.
C. I. LEE & CO., Inc., et al.
No. 347.
Circuit Court of Appeals, Second Circuit.
July 21, 1930.
On Reargument, December 15, 1930.
*104 *105 Crichton Clarke, of New York City, for appellant.
Bernard Katzen, of New York City, for appellees.
Before MANTON, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
SWAN, Circuit Judge (after stating the facts as above).
The questions of law which have been argued by the parties cannot properly be decided upon this record. There being no diversity of citizenship, the District Court is without jurisdiction to grant relief except pursuant to the terms of the Trade-Mark Act of 1905 as amended (15 USCA § 81 et seq.). Hunyadi Janos Corp. v. Stoeger, 10 F.(2d) 26 (C. C. A. 2). Assuming the validity of the plaintiff's trade-mark, and assuming further that its right to maintain suit has not been lost by use of the trade-mark in unlawful business, as provided by Trade-Mark Act 1905, § 21 (15 USCA § 101), its case fails *106 for want of proof of any use of the mark by defendants in interstate or foreign commerce. Section 16 of the act (15 USCA § 96) provides as follows:
"* * * Any person who shall, without the consent of the owner thereof, reproduce, counterfeit, copy, or colorably imitate any such trade-mark and affix the same to merchandise * * * and shall use, or shall have used, such reproduction, counterfeit, copy, or colorable imitation in commerce among the several States, or with a foreign nation, or with the Indian tribes, shall be liable to an action for damages therefor at the suit of the owner thereof. * * *"
In a trade-mark suit under the federal act, it is essential for the plaintiff to allege and prove an infringement which falls within the terms of this section; counterfeit use of the mark in intrastate sales is not sufficient. Kasch v. Cliett, 297 F. 169 (C. C. A. 5); United States Printing Co. v. Griggs, Cooper & Co., 279 U. S. 156, 158, 49 S. Ct. 267, 73 L. Ed. 650; Louis Bergdoll Brewing Co. v. Bergdoll Brewing Co., 218 F. 131 (D. C. E. D. Pa.); and see, as to the Trade-Mark Act of 1881 (21 Stat. 502), Ryder v. Holt, 128 U. S. 525, 9 S. Ct. 145, 32 L. Ed. 529; Warner v. Searle & Hereth Co., 191 U. S. 195, 24 S. Ct. 79, 48 L. Ed. 145.
The bill of complaint is absolutely barren of any allegation that defendants have used, or threaten to use, plaintiff's mark in interstate or foreign commerce. Proof of this fact is equally lacking. We have searched the record in vain for evidence of such use. The closest approach to it is Young's testimony at folio 112:
"* * * In regard to the reappearance in the market of defendant's Trojan goods, I have seen the goods and seen the invoices in numerous places. Reports from all our salesmen about the goods being offered around the country had reached me."
This is entirely consistent with the defendants having made only intrastate sales, and their purchasers, without connivance on their part, having resold them in other places. The only infringements proved were sales made by defendants within the state of New York. Since the necessary jurisdictional facts were neither alleged nor proved, the bill should have been dismissed for lack of jurisdiction instead of lack of equity.
The decree is reversed, and cause remanded for dismissal on the ground herein stated.
On Reargument.
The appeal having been decided upon a jurisdictional point raised by the court of its own motion, a reargument was granted upon that point. Thereupon the plaintiff moved (1) for leave to amend its bill of complaint by inserting therein an allegation that the corporate defendant sells "in commerce among the several states" the infringing articles; and (2) that certain affidavits filed in the court below on the motion for a preliminary injunction be admitted in evidence.
An appeal from a decree in equity is not a trial de novo, and this court lacks power to take new evidence. It may, of course, permit an incomplete record to be corrected by addition of what was omitted, but the affidavits in question were not offered in evidence on the trial below, and therefore cannot be deemed part of the record brought up for review by this appeal. Boone v. Chiles, 10 Pet. 177, 208, 9 L. Ed. 388; Hovland v. Smith, 22 F. (2d) 769, 770 (C. C. A. 9). Hence the motion as to the affidavits must be denied, and we do not consider whether the statements and admissions they contain would be sufficient to prove sales in interstate commerce by the defendants.
An appellate court may permit an amendment to conform the pleadings to the proof (Norton v. Larney, 266 U. S. 511, 516, 45 S. Ct. 145, 69 L. Ed. 413), but we are not aware of any principle which would justify us in going further. Therefore the motion to amend must be denied, since we cannot find in the record proof of interstate sales by the defendant.
We have carefully gone over the record again in the light of plaintiff's petition for reargument and the argument thereon, but we are constrained to adhere to our former opinion that evidence of interstate sales is lacking. Mr. Youngs' testimony that he had reports of the defendant's Trojans being offered for sale in Virginia and North Carolina was objected to, and the objection was sustained. Without this, his testimony comes down to the statement that the plaintiff's business is nation wide and is greatly affected by the competition of defendants' Trojan goods. In addition there is Exhibit 9, defendants' price list, which does not refer to any market, local or national, and which plaintiff would have us take as evidence that it is addressed to a national market. It was obtained by Pollaci in connection with an intrastate sale. There is also Exhibit 11, which describes defendants *107 as "manufacturers and jobbers," and contains an order blank reading:
"Address ...........................
"City ............... State ......."
This was also issued to Pollaci. All the evidence is as consistent with intrastate as with interstate business by defendants. The only sales actually proved were intrastate.
However, we think the order contained in our original opinion was unduly strict in directing dismissal of the suit for lack of jurisdiction. It is obvious that the parties tried the case on the theory that the only issue was the question of legality or illegality of plaintiff's business and of its trade-mark on goods of this character. Plaintiff should be given an opportunity to prove, as counsel asserts it can, that defendants are really infringing in interstate commerce, and of course the defendants may contest that issue. It is within our power to send the case back for further evidence upon a single issue. Drainage Dist. No. 7 v. Sternberg, 15 F.(2d) 41 (C. C. A. 8). See Lee v. State Bank & Trust Co., 38 F.(2d) 45 (C. C. A. 2). Accordingly, the cause will be remanded, with directions to dismiss for lack of jurisdiction, unless plaintiff shall amend its complaint to allege sales by defendants of the infringing article in interstate commerce, and, in that event, to reopen the case for evidence by both parties upon that issue, and, if infringement in interstate commerce is proved, for the entry of an appropriate decree.
The entry of a decree, if infringement in interstate commerce is proved, will require a determination by the District Court of the merits of the controversy which has been briefed and argued on this appeal, namely, whether the character of its business is such as to preclude plaintiff from obtaining protection in a court of equity. If we express no opinion on this question, we are assured that another appeal will follow, however it may be decided below. No new evidence is to be received on this issue; the evidence is already before us, and its legal effect has been fully argued. Under these circumstances, we think that the time of this court will be conserved and justice will be accorded the parties more promptly, if we express our views at this time. Consequently we shall do so, though recognizing that it is contrary to our usual practice of deciding no more than is essential to dispose of an appeal.
There is no federal statute forbidding the manufacture or sale of contraceptives. The articles which the plaintiff sells may be used for either legal or illegal purposes. If, for example, they are prescribed by a physician for the prevention of disease, or for the prevention of conception, where that is not forbidden by local law, their use may be legitimate; but, if they are used to promote illicit sexual intercourse, the reverse is true. The plaintiff confines its own sales to druggists and to jobbers who will agree to sell only to licensed drug stores. If purchasers from it sometimes resell illegally, that, plaintiff says, is a matter with which it has nothing to do, and should not put its business beyond the pale of equitable protection against an admitted infringement of its trade-mark.
The relief which plaintiff may obtain depends upon the provisions of the Trade-Mark Act of 1905, as amended, and section 21 thereof (33 Stat. 729 [15 USCA § 101]) reads as follows:
"That no action or suit shall be maintained under the provisions of this Act in any case when the trade-mark is used in unlawful business, or upon any article injurious in itself, or which mark has been used with the design of deceiving the public in the purchase of merchandise, or has been abandoned, or upon any certificate of registration fraudulently obtained."
It is the defendants' contention that this provision precludes the maintenance of plaintiff's suit.
As already stated, no federal statute forbids the manufacture or sale of contraceptives. By the local law of New York, such articles are not absolutely prohibited. Section 1145 of the Penal Law authorizes the supplying of them to lawfully practising physicians, or by their direction. In People v. Sanger, 222 N. Y. 192, 195, 118 N. E. 637, 638, there is a dictum that "* * * the protection thus afforded the physician would also extend to the druggist, or vendor, acting upon the physician's prescription or order."
Indeed, the individual defendant in the present suit has been convicted of criminal infringement of plaintiff's registered trade-mark, a result which can be reached under the local statutes only on the theory that the articles are things "which may be lawfully kept or offered for sale." N. Y. Penal Law, §§ 2350, 2352, 2354; People v. Lee (Apr. 17, 1930) 229 App. Div. 713, 241 N. Y. S. 824,[1] appeal to New York Court of Appeals refused April 28, 1930.[2] Hence it cannot be *108 held under either federal or state law that all sales of the plaintiff's article are illegal. Since the article may be legally sold under some circumstances, we see no reason to doubt the validity of the trade-mark; nor can we say that it is necessarily "used in unlawful business" within the terms of said section 21.
Defendants' argument, however, relies upon sections of the Criminal Code (USCA, title 18, §§ 334, 396) and the plaintiff's own testimony that it distributes its merchandise by mail and interstate common carriage. Section 334 makes criminal the mailing of "nonmailable matter," and defines that phrase to include "every article or thing designed, adapted, or intended for preventing conception * * * or for any indecent or immoral use; and every article, instrument, substance, drug, medicine, or thing which is advertised or described in a manner calculated to lead another to use or apply it for preventing conception or producing abortion, or for any indecent or immoral purpose. * * *"
Section 396 reads as follows: "Whoever shall * * * knowingly deposit or cause to be deposited with any express company or other common carrier, for carriage from one State * * * to any other State * * * any drug, medicine, article or thing designed, adapted, or intended for preventing conception, or producing abortion, or for any indecent or immoral use; * * * shall be fined not more than $5,000 or imprisoned not more than five years, or both."
Taken literally, this language would seem to forbid the transportation by mail or common carriage of anything "adapted," in the sense of being suitable or fitted, for preventing conception or for any indecent or immoral purpose, even though the article might also be capable of legitimate uses and the sender in good faith supposed that it would be used only legitimately. Such a construction would prevent mailing to or by a physician of any drug or mechanical device "adapted" for contraceptive or abortifacient uses, although the physician desired to use or to prescribe it for proper medical purposes. The intention to prevent a proper medical use of drugs or other articles merely because they are capable of illegal uses is not lightly to be ascribed to Congress. Section 334 forbids also the mailing of obscene books and writings; yet it has never been thought to bar from the mails medical writings sent to or by physicians for proper purposes, though of a character which would render them highly indecent if sent broadcast to all classes of persons. See United States v. Chesman, 19 F. 497, 498 (C. C. E. D. Mo.); United States v. Clarke, 38 F. 500, 502 (D. C. E. D. Mo.); United States v. Smith, 45 F. 476, 478 (D. C. E. D. Wis.); United States v. Dennett, 39 F.(2d) 564, 568 (C. C. A. 2). It would seem reasonable to give the word "adapted" a more limited meaning than that above suggested and to construe the whole phrase "designed, adapted or intended" as requiring an intent on the part of the sender that the article mailed or shipped by common carrier be used for illegal contraception or abortion or for indecent or immoral purposes. See Bours v. United States, 229 F. 960, 964 (C. C. A. 7). However, we do not find it necessary to decide this question in the present case.
Let it be assumed that plaintiff violated the provisions of the Criminal Code (18 USCA §§ 334, 396) by mailing and shipping its merchandise. The question then arises whether such a violation precludes the maintenance of a trade-mark infringement suit by reason of section 21 of the Trade-Mark Act. That section bars the remedy only "when the trade-mark is used in unlawful business"; and it may be persuasively urged that only the use of the trade-mark in making unlawful sales brings section 21 into play. By way of illustration of the argument, suppose that a manufacturer of explosives sells them under a registered trade-mark, and in one instance shipped the goods to a purchaser by common carrier without marking them as explosives, as required by federal statute. 18 USCA § 385. It is by no means clear that such a violation of law would prevent the maintenance by the manufacturer of any suit for infringement of his trade-mark. Indeed, we should be disposed to hold that it would not. Not every unlawful act in connection with a business brings the trade-mark under the ban of section 21. Numerous cases have held that violation of the Sherman Act (15 USCA § 1 et seq.) does not bar a plaintiff from enjoining an infringer of his trade-mark, although in none of them, we believe, has this section been mentioned. Coca-Cola Co. v. Gay-Ola Co., 200 F. 720 (C. C. A. 6); Coca-Cola Co. v. Bennett, 238 F. 513 (C. C. A. 8); Nims, Unfair Competition (3d Ed.) § 418, and cases there cited. Taking literally the phrase under consideration, it is difficult to say that the trade-mark "is used" in the illegal transportation. But, aside from merely verbal difficulties and viewing the more important consideration of the probable purpose of the legislation, the purpose of section *109 21 would seem to be to prevent a plaintiff from enforcing his trade-mark when he uses it to promote sales which are unlawful, or which deceive the public in respect to the goods or to the validity of the trade-mark. Hence, in our judgment, the plaintiff's violation of the mailing statute or the transportation statute, if such violations be assumed, would not bar its remedy, provided the sales it seeks to protect from trade-mark infringement by the defendants are legal. The only case found which has discussed the meaning of section 21 construes it as merely declaratory of the long-established equitable principle regarding the defense of illegal conduct on the part of a plaintiff. Anheuser-Busch v. Cohen, 37 F.(2d) 393, 395 (D. C. Md.).
We must consider, therefore, whether the proof shows plaintiff's business of selling to be unlawful. Its sales are to wholesale and retail druggists and to jobbers who will agree to sell only to drug stores. Section 1142 of the New York Penal Law makes it a misdemeanor to sell or offer for sale any article, drug, or medicine for the prevention of conception, or for causing unlawful abortion, but section 1145 provides that "the supplying of such articles to such [lawfully practicing] physicians or by their direction or prescription, is not an offense under this article." As already stated, the highest court of the state has said that the protection thus afforded physicians extends also to "the druggist, or vendor, acting upon the physician's prescription or order." People v. Sanger, supra. Doubtless the druggist or vendor to whom the court had reference is the retailer from whom the physician or his patient would naturally purchase. Nothing is said with reference to the right of a manufacturer to sell to druggists without a physician's order. But in view of the way modern business is conducted, such a right we believe to be implicit in the statute; otherwise no local supply of abortifacient or contraceptive drugs or instruments would be available for use by physicians. It can hardly be supposed that the physician was to seek out a manufacturer each time he had professional need for a drug or instrument of the generally prohibited character, or that, in anticipation of a possible future need, he should in advance direct the manufacturer to place a supply with the local druggist whom he favored. We conclude, therefore, that a manufacturer of drugs or instruments for medical use may in good faith sell them to druggists or other reputable dealers in medical supplies, or to jobbers for distribution to such trade.
The defendant contends that the volume of plaintiff's sales demonstrates that its product is being illegally disposed of by retail druggists, and charges plaintiff with complicity in their illegal sales. Plaintiff's president testified that its business runs to about 12,000 gross per month. This means approximately 20,000,000 a year, and plaintiff is not the only manufacturer of such articles. Defendants' witness, Dr. Jacobs, testified that the article is infrequently prescribed by physicians, and is commonly sold by drug stores to any customer who calls for it, and without requiring a physician's prescription. It can hardly be doubted that such a volume of business could not under the circumstances be supported solely by the legitimate demand. Let it be conceded, then, that some of plaintiff's goods are used legitimately but many are disposed of by its purchasers for illegal uses, as plaintiff itself must know. Does this fact preclude it from maintaining its suit because of section 21 or general equitable principles?
In Fuller v. Berger, 120 F. 274, 65 L. R. A. 381 (C. C. A. 7), certiorari denied 193 U. S. 668, 24 S. Ct. 852, 48 L. Ed. 839, the complainant sought to enjoin infringement of a patent on a bogus coin detector for coin-operated vending machines. The only use to which complainant put the detector was to guard gambling machines made by it. Defendants, without license, applied the detector to gambling machines of their make. It was urged that the complainant had no standing because he came into court with unclean hands, but an injunction was granted, the court saying as to this defense (page 278 of 120 F.):
"* * * Equity is not concerned with the general morals of a complainant; the taint that is regarded must affect the particular rights asserted in his suit. * * * But if the defendant can do no more than show that the complainant has committed some legal or moral offense, which affects the defendant only as it does the public at large, the court must grant the equitable remedy and leave the punishment of the offender to other forums."
This principle was followed in Board of Trade v. L. A. Kinsey Co., 130 F. 507, 69 L. R. A. 59 (C. C. A. 7), affirmed 198 U. S. 236, 25 S. Ct. 637, 49 L. Ed. 1031, where the Board of Trade was allowed to protect its property right in market quotations based on the transactions on its exchange; the defense urged being that a large percentage of such transactions were illegal gambling contracts and that the plaintiff permitted such gambling *110 on its exchange. There can be no doubt that the general rule that one coming into equity must come with clean hands is confined to the conduct of the party in the matter before the court, and not to matters aliunde. This is the ratio decidendi of the authorities, already referred to, holding that the owner of a patent or a trade-mark can protect his property and enforce his rights against an infringer, even though the plaintiff may be engaged in a business which is in restraint of trade. See Coca Cola Cases, supra. See, also, Talbot v. Independent Order of Owls, 220 F. 660, 662 (C. C. A. 8).
In the case before us, the plaintiff has a valid trade-mark, and, under general equitable principles, is entitled to protect its sales, so far as they are legal, against unfair competition by piracy of the mark. In our opinion section 21 gives a defendant in equity no new or greater defense. If the defendant's unfair competition were shown to deprive the plaintiff of the opportunity to make only sales which were illegal, a court of equity might properly refuse relief, as it did in Portsmouth Brewing Co. v. Portsmouth Brewing & Bottling Co., 67 N. H. 433, 30 A. 346, and McVey v. Brendel, 144 Pa. 235, 22 A. 912, 13 L. R. A. 377, 27 Am. St. Rep. 625. If, for example, plaintiff were selling direct to the public without a physician's prescription, it could not complain because defendant, by making similar sales under piracy of plaintiff's trade-mark, deprived it of such illegal business. But plaintiff sells only to druggists or to jobbers for distribution to druggists. Sales to druggists are legal unless the plaintiff is in complicity with the druggists' intention to resell illegally. Mere knowledge by a vendor of his vendee's unlawful purpose does not render the contract illegal in most jurisdictions. Graves v. Johnson, 179 Mass. 53, 60 N. E. 383, 88 Am. St. Rep. 355; Tracy v. Talmage, 14 N. Y. 162, 67 Am. Dec. 132; Hill v. Spear, 50 N. H. 253, 9 Am. Rep. 205; cf. Hanauer v. Doane, 12 Wall. 342, 20 L. Ed. 439 (making distinction as to "heinous" crime); 3 Williston, Contracts, § 1754. While the volume of plaintiff's sales throughout the country justifies the inference that illegal sales are being made by its vendees, and that plaintiff must know this, there is nothing to show plaintiff's complicity in aiding or desiring such illegal sales.
Defendants argue that, while plaintiff's contracts may be legally enforceable against its vendees, its business is in its nature sufficiently reprehensible to be outside the field of equitable protection. It must be conceded, however, that no reprehensibility attaches to such part of the business as relates to goods that never become diverted to illegal use. As to so much surely plaintiff is entitled to protection. If there is another part relating to goods which may become so diverted, that is a collateral matter which defendants cannot successfully invoke to excuse infringement of plaintiff's valid trade-mark. Cf. World's Dispensary Medical Ass'n v. Pierce, 203 N. Y. 419, 423, 96 N. E. 738; Bentley v. Tibbals, 223 F. 247, 252 (C. C. A. 2). Accordingly, if the District Court shall find that defendants have infringed in interstate commerce, plaintiff should be granted an injunction and accounting; but on such accounting plaintiff should recover no damages unless it can show that it has been injured in respect to sales which it might legally have made.
The decree is reversed, and the cause remanded for further proceeding in conformity with this opinion.
NOTES
[1] Memorandum without opinion.
[2] No opinion filed.
| {
"pile_set_name": "FreeLaw"
} |
No. 2--00--0032
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
_________________________________________________________________
KIMBERLY A. PLATSON, ) Appeal from the Circuit Court
) of Du Page County.
Plaintiff-Appellant,
)
)
v.
) No. 99--L--0288
)
NSM, AMERICA, INC.,
)
)
Defendant-Appellee
)
Honorable
) Robert K. Kilander,
(Mark Eigenbauer, Defendant).
) Judge, Presiding
.
_________________________________________________________________
JUSTICE O'MALLEY delivered the opinion of the court
:
Plaintiff, Kimberly A. Platson, appeals the judgment of the circuit court granting the motion to dismiss of defendant NSM, America, Inc. (NSM)
, under section 2--615 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2--615 (West 1998)). We reverse.
BACKGROUND
Plaintiff filed a complaint on March 12, 1999, alleging that, while employed by NSM through a work-study program offered through her high school, she was physically assaulted on NSM's premises by defendant Mark Eigenbauer, then an employee of NSM. In counts I through IV, plaintiff pleaded causes of action against Eigenbauer for, respectively, assault, battery, false imprisonment, and intentional infliction of emotional distress. On NSM's motion, the trial court dismissed without prejudice counts V, VI, and VII of the complaint against NSM, alleging, respectively, vicarious liability, negligent supervision, and breach of contract. On March 12, 1999, plaintiff filed an amended complaint against NSM. Counts V through IX alleged, respectively, negligent supervision, assault, battery, false imprisonment, and intentional infliction of emotional distress.
The relevant factual allegations in the complaint are as follows. NSM, whose principal place of business is located in the Village of Bensenville, Du Page County, Illinois, sells juke boxes, among other items. In June 1996, plaintiff, then a 16-year-old student at Lake Park High School, began part-time employment with NSM as part of a work-study program offered by her school. NSM had voluntarily agreed to participate in the program. NSM executed a document titled "Cooperative Education Agreement" (CEA). The CEA requires the employer and the student's teacher-coordinator to "design a training program for the student based on the student's job description" and to "periodically evaluate the student's progress." According to the CEA, the student earns wages as well as "job credit" through the employment. The CEA provides that the work site, referred to as the "training station," is "an extension of Lake Park High School" and that the student is bound by the rules and regulations of the school and by the policies of the training station. The CEA refers to the student as the "student-learner." The CEA further provides that the employer is to notify the teacher-coordinator of a change in the student's progress. Also, unless permitted by the teacher-coordinator, the student may not work on days the student is absent from school. Finally, the CEA states that the employer is to "provide adequate supervision at all times and safety training according to industry standards." Plaintiff incorporated a copy of the agreement into her complaint.
When she began working for NSM, plaintiff was assigned to administrative duties including office and clerical work. Based on plaintiff's satisfactory performance of these duties, NSM assigned her to the marketing department around August 1996. Beginning around November 1996 NSM's employee, Eigenbauer, would "from time to time" approach plaintiff while she was performing her job duties on NSM's premises and "with his hands touch [plaintiff's] body." The touching "included rubbing and massaging [plaintiff's] shoulders." Eigenbauer would also on occasion "intentionally brush his body against Plaintiff's body" while she was performing her job duties. A total of at least five supervisors and employees, including plaintiff's supervisor, witnessed the touching. Eigenbauer "did not touch the bodies of other employees" of NSM. It was "well known" throughout the office in which plaintiff worked "that Eigenbauer repeatedly sought out Plaintiff to touch her." At no time did plaintiff tell her supervisor or any other employee of NSM "that Eigenbauer's touching of her was appropriate, welcome or acceptable." At no time did plaintiff's supervisor demand that Eigenbauer stop the touching.
Despite NSM's "knowledge of the inappropriate conduct by Eigenbauer," plaintiff's supervisor scheduled her to work alone with Eigenbauer on March 13, 1997. At work that evening, Eigenbauer approached plaintiff while she was on break in the warehouse area and "physically grabbed her." Plaintiff freed herself and returned to her office. Eigenbauer followed plaintiff into her office and stood by her desk, blocking her exit from the office. Eigenbauer then "grabbed plaintiff's waist and pulled her toward him, causing plaintiff to fall to the floor on her knees." He then grabbed plaintiff from behind, "forced himself on top of her and pressed himself against her."
Plaintiff freed herself and attempted to leave the room, but Eigenbauer physically blocked the exit. Plaintiff managed to get around Eigenbauer and sought to leave the building. Blocking the exterior door, Eigenbauer told plaintiff that he wanted to lock her in to prevent her from leaving. Plaintiff managed to leave but, due to the physical and emotional trauma caused by the attack, did not return to work until March 19, 1997, at which time she reported the attack to one of her supervisors.
In count V (negligent supervision), plaintiff alleges that NSM failed to fulfill its duty to supervise its employees in scheduling plaintiff to be alone with Eigenbauer, leading to an attack that was foreseeable to NSM given its knowledge of Eigenbauer's prior inappropriate physical touching of plaintiff. In counts VI through IX, plaintiff alleges three alternative bases upon which to hold NSM liable for Eigenbauer's intentional torts. First, plaintiff maintains that NSM's agreement to employ plaintiff, a minor and a high school student, in a work-study program and to supervise her at all times created between plaintiff and NSM what tort law recognizes as a "special relationship," according to which NSM had a duty to protect plaintiff from Eigenbauer's acts including certain acts committed outside the scope of his employment. Second, plaintiff contends that, because NSM knew or should have known that Eigenbauer posed a threat to plaintiff, NSM had a duty under section 317 of the Restatement (Second) of Torts (Restatement (Second) of Torts §317 (1965)) to exercise reasonable care to prevent its employee, Eigenbauer, from intentionally harming plaintiff. Third, plaintiff argues that, because NSM agreed to supervise plaintiff and thus "voluntarily undertook a duty to protect [her] during the course of her employment," NSM had a duty under section 324A of the Restatement (Second) of Torts (Restatement (Second) of Torts §324A (1965)) to exercise reasonable care to protect plaintiff.
On NSM's motion under section 2--615 of the Code, the court dismissed counts V through IX. Finding that the foreseeability of Eigenbauer's March 13 assault was an element of each count, the court held that the complaint's allegations did not demonstrate that Eigenbauer's touching of plaintiff put NSM on notice that Eigenbauer might commit an assault such as occurred on March 13, 1997. The court reasoned that because the "touching" described in the complaint was not "obviously offensive" but could mean "any number of things," such as "shak[ing] [plaintiff's] hand" or "taking her by the elbow and handing her a cup of coffee," it was not sufficient to warn NSM of the danger Eigenbauer posed to plaintiff.
On appeal, plaintiff argues that, by finding her complaint failed to state a cause of action because the "touching" she described could have been innocent touching, the trial court erroneously viewed her complaint in the light least favorable to her. Plaintiff generally argues that, when properly viewed in accordance with section 2--615, her complaint adequately pleads that NSM knew or should have known Eigenbauer had been touching her inappropriately and that NSM was remiss for failing to protect her from Eigenbauer. Specifically, plaintiff asserts she was not required to allege that she informed NSM of her objection to Eigenbauer's touching in order to state a cause of action.
NSM replies that plaintiff failed to state a cause of action for negligent supervision or for failure to control an employee under section 317 because she did not allege facts showing that Eigenbauer's assault was foreseeable to a reasonable person. NSM asserts that plaintiff's specific failure was in not alleging that she found Eigenbauer's prior touching objectionable and that she had communicated her objection to her supervisor. NSM also argues that there was no special relationship between plaintiff and NSM because the CEA obligated NSM to oversee the quality of plaintiff's work, not to insure her safety. For the same reason, NSM submits, plaintiff failed to state a cause of action under section 324A. NSM argues that plaintiff failed to bring a claim under section 324A for the additional reason that, even if the CEA could be construed to impose on NSM a duty to protect, NSM could not have assumed a duty to protect plaintiff against Eigenbauer's physical advances toward plaintiff, of which it necessarily had no knowledge at the time it executed the CEA.
ANALYSIS
A section 2--615 motion attacks the legal sufficiency of a complaint. The dismissal of a count in a complaint for legal insufficiency is appropriate under section 2--615 only if, when viewed in a light most favorable to the opposing party, the factual allegations underlying the count are insufficient to state a cause of action upon which relief can be granted.
Abbasi v. Paraskevoulakos
, 187 Ill. 2d 386, 391 (1999). A claim should not be dismissed on the pleadings unless it clearly appears that no set of facts can be proved under the pleadings that will entitle the plaintiff to recover under that claim.
Abbasi
, 187 Ill. 2d at 391.
In other words, if the pleadings put into issue one or more facts material to recovery under a claim, evidence must be taken to resolve such issues, and judgment dismissing that claim on the pleadings is not appropriate.
In re Estate of Davis
, 225 Ill. App. 3d 998, 1000 (1992). A claim need only show a possibility of recovery, not an absolute right to recovery, to survive a section 2--615 motion.
American Environmental, Inc. v. 3-J Co.
, 222 Ill. App. 3d 242, 248 (1991). Review of a section 2--615 dismissal is
de novo
.
Abbasi
, 187 Ill. 2d at 391.
We address first the sufficiency of plaintiff's claim of negligent supervision. To succeed in an action for negligent supervision, the plaintiff must plead and prove that the employer knew or should have known that its employee had a particular unfitness for his position so as to create a danger of harm to third persons and that the employer's failure to safeguard the plaintiff against this particular unfitness proximately caused the plaintiff's injury.
Van Horne v. Muller
, 185 Ill. 2d 299, 313 (1998);
Mueller v. Community Consolidated School District 54
, 287 Ill. App. 3d 337, 342-43 (1997). To satisfy the element of proximate causation, the plaintiff must demonstrate a "tangible connection" between the employee's particular unfitness for the job and the resulting harm to the plaintiff.
Carter v. Skokie Valley Detective Agency, Ltd.
, 256 Ill. App. 3d 77, 83 (1993). That is, the particular unfitness of the employee must have rendered the plaintiff's injury foreseeable to a person of ordinary prudence in the employer's position.
Van Horne
, 185 Ill. 2d at 313. Generally, the existence of proximate cause is a question of fact for the jury.
Nowak v. Coghill
, 296 Ill. App. 3d 886, 892 (1998). We conclude plaintiff has alleged sufficient facts to establish a possibility of recovery for negligent supervision. Plaintiff alleges that her supervisor witnessed Eigenbauer touch her on several occasions. Eigenbauer would rub and massage plaintiff's shoulders and intentionally brush his body against hers. Plaintiff avers that Eigenbauer did not similarly treat other employees of NSM and that it was known throughout the office in which plaintiff worked that Eigenbauer's advances were focused on plaintiff. Despite this knowledge, NSM made no attempts to correct Eigenbauer's conduct but in fact scheduled her to work alone with Eigenbauer, creating a setting in which Eigenbauer could assault plaintiff unobserved by a third party. We conclude that, if developed through the proof process, these allegations clearly could establish NSM's liability for negligent supervision.
NSM cites no authority for its claim that plaintiff's claim of negligent supervision is insufficiently pleaded due to her failure to allege positively that she objected to Eigenbauer's touching or that she communicated to her supervisor that she considered the touching objectionable. Indulging plaintiff with every reasonable inference, and given the circumstances in which the touching occurred, the dispositive question is not whether plaintiff vocalized her objection to Eigenbauer's touching. Young and vulnerable, a 16-year-old work-study student subjected to unwanted physical advances by a fellow employee might, for a number of reasons (whether sound or unsound), be disinclined to speak up. Indeed, whether someone of plaintiff's age and status would even have the capacity to consent to such advances is a matter for debate. Certainly, given the context, the impropriety of a male employee's repetitive massage and rubbing of the shoulders of a 16-year-old female fellow employee and his intentional brushing of his body against hers could be evident readily to the adults, including plaintiff's supervisor, who witnessed it firsthand, even if not to the 16-year-old female employee herself. In other words, the failure of plaintiff, a child, to recognize the inappropriateness of Eigenbauer's conduct and thus be on notice of its dangerous potential is not dispositive of the factual question of whether adults who witnessed the conduct would have been placed on notice of the potential danger. It is reasonable to infer that, whatever plaintiff's reticence during the period in which the touching occurred, NSM was fully aware that Eigenbauer was singling out plaintiff for improper advances. Further, plaintiff's allegation that Eigenbauer engaged in such objectionable conduct in full view of supervisors and other employees permits the reasonable inference that NSM should have known that Eigenbauer was capable of worse if left alone with plaintiff. We conclude that plaintiff has adequately alleged a cause of action for negligent supervision based on NSM's failure to take reasonable measures to protect plaintiff from Eigenbauer once NSM was aware of Eigenbauer's inappropriate touching of plaintiff.
The previous discussion also is relevant to NSM's challenge to plaintiff's claim under section 317. Section 317 provides that an employer may, in certain circumstances, be held liable for the harm caused by an employee acting outside the scope of his employment.
Escobar v. Madsen Construction Co.
, 226 Ill. App. 3d 92, 95 (1992). Section 317 provides in relevant part:
"A master is under a duty to exercise reasonable care so to control his servant while acting outside the scope of his employment as to prevent him from intentionally harming others or from so conducting himself as to create an unreasonable risk of bodily harm to them, if
(a) the servant
(i) is upon the premises in possession of the master or upon which the servant is privileged to enter only as his servant, or
(ii) is using a chattel of the master, and
(b) the master
(i) knows or has reason to know that he has the ability to control his servant, and
(ii) knows or should know of the necessity and
opportunity for exercising such control."
Restatement (Second) of Torts §317 (1965).
Illinois courts have adopted this rule.
Kigin v. Woodmen of the World Insurance Co.
, 185 Ill. App. 3d 400, 403 (1989) (complaint under section 317 properly alleged that defendant's failure to prevent an intoxicated 41-year-old camp counselor from venturing off into the woods at 11 p.m. with a 15-year-old female camp guest after providing her with alcohol made defendant responsible for the sexual molestation that occurred subsequently).
We determine plaintiff has alleged facts that, if proved, would entitle her to relief under section 317. First, plaintiff alleges that Eigenbauer was employed by NSM when he assaulted plaintiff on NSM's premises. Second, one reasonably can infer from plaintiff's allegations that NSM was aware that plaintiff was the object of Eigenbauer's inappropriate physical advances. NSM thus had reason to know that Eigenbauer was likely to repeat such conduct, or engage in worse, if left alone with plaintiff while on work premises. Third, it is reasonable to infer that NSM could have taken measures to control Eigenbauer, including reprimanding or disciplining him. At the very least, NSM could have avoided scheduling plaintiff and Eigenbauer to work alone together on NSM's premises. Nonetheless, NSM created a situation in which Eigenbauer could, and allegedly did, assault plaintiff while they were alone on NSM's premises. Plaintiff has properly stated a cause of action under section 317.
We also hold that plaintiff has stated a cause of action against NSM based on the "special relationship" doctrine. Generally, a person is not liable for harm to another resulting from the person's failure to defend the other against a third party's criminal attack.
Siklas v. Ecker Center for Mental Health, Inc.
, 248 Ill. App. 3d 124, 130 (1993). As recognized by
Eversole v. Wasson
, 80 Ill. App. 3d 94, 96-97 (1980), cited by plaintiff, an exception to this general rule exists where the plaintiff bore a "special relationship" to the defendant when the attack by the third party occurred. See also
Hernandez v. Rapid Bus Co.
, 267 Ill. App. 3d 519, 524 (1994). A special relationship exists where,
inter alia
, one voluntarily takes custody of another so as to deprive the other of his normal opportunities for protection. Restatement (Second) of Torts §314A(4) (1965); see also
Fancil v. Q.S.E. Foods, Inc.
, 60 Ill. 2d 552, 560 (1975).
Even a person bearing a special relationship to another has a duty to protect that person only from reasonably foreseeable attacks by third parties.
Hernandez
, 267 Ill. App. 3d at 524.
What it means to "take custody of another" or "deprive another of his normal opportunities for protection" is not made obvious by the language of section 314A(4). There are very few cases in Illinois applying section 314A(4). In
Doe v. Goff
, 306 Ill. App. 3d 1131, 1134-36 (1999), the court affirmed the trial court's summary judgment on the plaintiff's claim that the defendant, the Boy Scouts of America, was liable as a voluntary custodian for a Boy Scouts volunteer's molestation of the plaintiff during a Boy Scouts camping trip. The court held that the plaintiff had raised a question of fact as to whether defendant was plaintiff's voluntary custodian for the camping trip but not as to whether the molestation was reasonably foreseeable to the defendant.
Goff
, 306 Ill. App. 3d at 1134. In
Hernandez
, 267 Ill. App. 3d at 524, the court held that the plaintiff had not raised a question of fact as to whether the defendant, a bus company, positioned itself as a section 314A(4) voluntary custodian to the plaintiff's daughter, a special education student, by instituting a change in its bus route that resulted in the inability of the daughter's regular attendant to be present on the defendant's bus when the defendant dropped the daughter off at school and to escort her into the building. The court observed that, under the facts alleged, the defendant did not deprive the plaintiff's daughter of her normal opportunities for protection because the regular attendant could have arranged her own transportation to assure her presence at the bus stop or could have requested her supervisor to assign a different attendant to the plaintiff's daughter.
Hernandez
, 267 Ill. App. 3d at 523-24.
These cases do not elaborate section 314A(4)'s definition of the so-called "voluntary custodian/protectee" relationship. Nor have we found much persuasive authority from outside this jurisdiction. We do find helpful some observations by the Ohio court of appeals in
Slagle v. White Castle Systems, Inc.
, 79 Ohio App. 3d 210, 607 N.E.2d 45 (1992). In
Slagle
, plaintiffs claimed that the defendant employer had assumed the status of a voluntary custodian to their son, a minor, simply by employing him. The court held that the employment relationship did not alone create a custodial relationship under section 314A(4).
Slagle
, 79 Ohio App. 3d at 217, 607 N.E.2d at 49-50. The court observed that to assume custody of a child is to stand "
in loco parentis
to the child, accepting all the rights and responsibilities that go with that status."
Slagle
, 79 Ohio App. 3d at 217, 607 N.E.2d at 49; see also
Donaldson v. Young Women's Christian Ass'n
, 539 N.W.2d 789, 792 (Minn. 1995) ("Typically, the plaintiff [in a section 314A(4) relationship] is in some respect particularly vulnerable and dependent on the defendant, who in turn holds considerable power over the plaintiff's welfare"). Thus,
"[t]o establish a custodial relationship between an employer and a minor employee, there must be proof that the employer voluntarily assumed the additional responsibilities of a custodian towards the child."
Slagle
, 79 Ohio App. 3d at 217, 607 N.E.2d at 50. A custodial relationship between employer and employee extends "far beyond the degree of control and supervision typically exercised by an employer over a minor employee."
Slagle
, 79 Ohio App. 3d at 217, 607 N.E.2d at 50.
Clearly, the CEA does not definitely establish that NSM voluntarily took custody of plaintiff for purposes of section 314A(4) during the time she was on NSM's premises working for it. Nor, however, is the possibility foreclosed by the CEA. NSM voluntarily employed plaintiff pursuant to a work-study program and promised adequately to supervise her at all times. NSM claims that the CEA's supervision requirement merely is a measure to insure the quality of the student's work. "Supervision" obviously is not so limited by definition, and NSM cites no contextual limitation to support its position. Indeed, the fact that the provision for supervision is linked with the provision for "safety training" in that both appear in the same sentence raises a legitimate question of whether the employer's supervision of the work-study student at least is to insure the safety of the student in addition to the quality of her work. NSM's interpretation of the CEA is undermined further by the fact that the necessity of supervision to monitor the work-study student's work quality already is implied in the CEA's requirement that the employer and the teacher-coordinator evaluate the student's work. Thus, the supervision requirement in the CEA reasonably can be interpreted as a measure to insure the work-study student's safety.
This provision for the work-study student's protection is in keeping with the nature of the work-study program at Lake Park High School. The CEA leaves little doubt that the student's employment through the work-study program is an educational exercise. The CEA refers to the student participant in the work-study program as a "student-learner" and the employer's workplace as a "training station" and an "extension" of the student's school. Moreover, the CEA provides that a student generally is not permitted to work on days the student is absent from school.
We believe, then, that by participating in Lake Park High School's work-study program and signing the CEA an employer assumes the delicate charge of mentoring a student in the world of work. A work-study student is vulnerable not only because of age and inexperience. In addition to the power possessed by any employer over its employee, the work-study employer has the power to affect the student's academic standing through its evaluation of the student's work performance. According plaintiff the benefit of every reasonable inference, we assume that when NSM assigned plaintiff to work alone with Eigenbauer it was enjoying a disparity of power between itself and a student-employee who was subject to the combined pressures of work and school. This disparity, we further infer, may have disinclined plaintiff from protesting or attempting to avoid working with Eigenbauer outside the presence of third parties who might have protected her from him. Therefore, given the nature of plaintiff's alleged work situation, we hold that plaintiff has adequately alleged that NSM took custody of her as defined by section 314(A)(4) and did not leave her avenues for self-protection as the defendant did the victim in
Hernandez
. We further hold that plaintiff has adequately alleged that NSM failed to exercise reasonable care in protecting her from Eigenbauer's attack.
We conclude, therefore, that plaintiff has stated a cause of action based on NSM's alleged custodial relationship with plaintiff as defined by section 314A(4).
Also for the reasons stated above, we hold that plaintiff has stated a cause of action under another exception to the general rule that one cannot be held liable for failing to protect another from criminal attack by a third person. This exception is provided by section 324A, which has been adopted by Illinois courts (
Scott & Fetzer Co. v. Montgomery Ward & Co.
, 112 Ill. 2d 378, 390 (1986)) and states in pertinent part:
"One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
***
(b) he has undertaken a duty owed by the other to the
third person." Restatement (Second) of Torts §324 A (1965).
Hernandez
, 267 Ill. App. 3d 519, cited by plaintiff and discussed above, illustrates the application of section 324A. In
Hernandez
, a girl, B.H., was raped by a fellow special education student while she walked unescorted from one of the defendant bus company's buses to her school. Suing on behalf of the girl, the plaintiff alleged that the defendant bus company was providing busing services under a contract with the Chicago Board of Education (Board) at the time of the attack. The plaintiff further alleged that, due to a change in the defendant's bus route, the Board's child welfare attendant who normally escorted B.H. and her fellow students from the bus into the school had to get off at a prior stop on the day of the attack and was not on the bus when B.H. and her assailant were dropped off. The plaintiff averred that the defendant's supervisor, knowing that the attendant would not be available to escort B.H. and the other students into the school that day, told the attendant that the defendant's driver would take B.H. and the other students to their school in the attendant's absence. The plaintiff alleged that, after dropping off B.H. and the other students, the driver informed the attendant that she made sure that the students went into the school building. The plaintiff also alleged that, when it agreed to supervise and escort the students on B.H.'s bus, the defendant knew that several of the students had violent propensities.
The trial court granted defendant's motion for summary judgment. The court found that, because the plaintiff did not allege that the defendant knew of the violent proclivities of the particular special education student who would attack B.H., the plaintiff failed to raise a material factual question of whether the attack on B.H. was foreseeable to the defendant.
Hernandez
, 267 Ill. App. 3d at 525.
The appellate court reversed, holding that plaintiff did not raise a question of fact as to whether there existed a section 314A(4) "special relationship" between B.H. and the defendant but did raise a question of fact as to whether defendant assumed a section 324A duty to protect B.H. The court first noted that, through the employment of child welfare attendants, the Board assumed the duty to supervise B.H. and the other special education students being transported on defendant's bus and to escort them to the door of their school. The court inferred from the record that, based on the attendant's conversation with the defendant's supervisor and its bus driver, the defendant, knowing that the attendant on that bus would be absent, voluntarily assumed the duty to supervise B.H. and the other special education students while transporting them and to escort them from the bus to the school that morning.
Hernandez
, 267 Ill. App. 3d at 525. The court also held that the trial court erred in finding that the foreseeability of B.H.'s attack hinged on defendant's knowledge of the violent tendencies of the particular special education student who attacked B.H.
Hernandez
, 267 Ill. App. 3d at 525. The court declared that it was not necessary that the defendant have foreseen the "precise harm that did in fact occur."
Hernandez
, 267 Ill. App. 3d at 525. Rather, the court explained, "it is sufficient if at the time of the defendant's action or inaction, a reasonably prudent person should have foreseen some harm to another as likely to occur."
Hernandez
, 267 Ill. App. 3d at 525-26.
We find that plaintiff has properly alleged that NSM, like the bus company in
Hernandez
, agreed to render services to another that NSM should have recognized were necessary for the protection of a third person and that this rendering of services included the performance by NSM of a duty owed by the other to the third person. NSM does not dispute that it was rendering services to Lake Park High School by participating in the work-study program or that the high school had a duty to protect plaintiff. (The parties do not address the extent of the school's duty to protect plaintiff and neither do we.) Instead, NSM claims that its participation in the work-study program did not entail a duty to protect plaintiff. As explained above, this assertion is belied by the CEA's requirement that NSM provide adequate supervision over the student employee at all times reasonably could be interpreted as NSM's assumption of the school's duty to protect plaintiff. Plaintiff's allegations also permit the reasonable inference that NSM violated this duty to protect in scheduling plaintiff to work alone with Eigenbauer despite knowing that Eigenbauer had improperly touched plaintiff on NSM's premises on several occasions.
NSM also argues that, even if it assumed a general duty to protect plaintiff in signing the CEA, it could be responsible only for defending plaintiff against dangers of which it then was cognizant and it necessarily had no knowledge of Eigenbauer's physical advances towards plaintiff when it executed the CEA. We find no such limitation on liability in the text of section 324A. The only support defendant offers for this notion is its observation that, in
Hernandez
, the bus company knew when it agreed to supervise the special education students that some of them had violent proclivities. There is no indication of an explicit or implicit holding in
Hernandez
that section 324A imposes liability only for a party’s failure to avert a danger of which it had knowledge when it undertook the duty to protect, and we refuse to render such a holding. One reasonably can infer from plaintiff’s allegations that NSM’s duty to protect plaintiff under the CEA encompassed dangers of which NSM had no knowledge when it signed the CEA. We hold, therefore, that section 324A would impose liability for NSM’s failure to protect plaintiff against such dangers provided they were reasonably foreseeable when NSM’s omission occurred.
Based on the foregoing, we hold that the trial court improperly dismissed counts V through IX of plaintiff's amended complaint.
The judgment of the circuit court of Du Page County is reversed, and the cause is remanded for further proceedings.
Reversed and remanded.
BOWMAN and RAPP, JJ., concur.
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418 F.Supp.2d 305 (2005)
LE BOOK PUBLISHING, INC., Plaintiff,
v.
BLACK BOOK PHOTOGRAPHY, INC. and Dag Media, Inc. Defendants.
No. 04 Civ. 10270(GEL).
United States District Court, S.D. New York.
August 16, 2005.
*306 Daniela Alba, Dowd & Marotta LLC, New York City, for Plaintiff.
Mark Heinze, Ofeck & Heinze, LLP, New York City, for Defendants.
*307 OPINION AND ORDER
LYNCH, District Judge.
Plaintiff, Le Book Publishing, brings this copyright and trademark infringement action against Black Book Photography, Inc. and Dag Media, Inc. Both plaintiff and defendants publish directories targeted to the "creative industries," such as those in the business of fashion, advertising, media and visual production. Plaintiff alleges that defendants copied its directory, in violation of the Copyright Act of 1976, 17 U.S.C. § 101 et seq., and the Lanham Act, 15 U.S.C. § 1051 et seq. Plaintiff also brings a New York state claim for trademark dilution.[1] Defendants have filed a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the listings in plaintiff's directory are not copyrightable, and the directories published by plaintiff and defendants are blatantly dissimilar. For the reasons discussed below, defendants' motion will be granted.
BACKGROUND
Plaintiff, Le Book Publishing, Inc., is the publisher of Le BookNew York 2003 ("Le Book NY"), a directory for the fashion, advertising, and visual production industries. The reference guide contains 800 pages of listings of professional photographers, art directors, fashion stylists, hair stylists, make-up artists, model agencies, rental services, magazines, record labels, film and production companies, public relations firms, fashion designers, cosmetic companies, and advertising agencies. (Am.Compl. ¶¶ 13-14.) Plaintiff has published annual editions of its book in the United States for the past ten years, and was one of the first publications to combine photography and production elements in its guide. (Id. 14, 17.) The Le Book NY edition at issue here was first published in December 2002 (id. ¶ 21), and was registered with the United States Copyright Office on September 23, 2004. (Id. at ¶¶ 20-21.)
Defendants publish The Black Book Creative Industry Directory 2004 ("The Black Book Directory"). The Black Book Directory was released in the spring of 2004. (Id. ¶ 100.) The Black Book Directory contains instances of direct copying from Le Book NY, such as the inclusion of "seed" names and addresses planted in plaintiff's directory for the purpose of discovering unauthorized copying. (Id. ¶¶ 23, 36.)
Plaintiff employs a staff of approximately five people who research, select, and collect vast amounts of information to be included in Le Book NY. (Id. ¶ 22.) Plaintiff contends that it has spent an inordinate amount of time, money and effort to compile its listings, acquire reliable contacts in the industry, and verify that the information is accurate. (Id. ¶ 22, 107.) Plaintiff believes that defendants'"copying of [p]laintiffs thoroughly researched, carefully compiled listings is patently unfair" and subsequently brought forth this action. (Id. ¶ 106.)
DISCUSSION
I. Standard on Motion to Dismiss
For the purposes of this motion to dismiss, the facts as alleged in plaintiffs complaint must be taken as true. Bolt Elec., Inc. v. City of New York, 53 F.3d 465, 469 (2d Cir.1995). All reasonable inferences must be drawn in the plaintiffs favor. Freedom Holdings, Inc. v. Spitzer, 357 *308 F.3d 205, 216 (2d Cir.2004). At the same time, "[g]eneral, conclusory allegations need not be credited . . . when they are belied by more specific allegations of the complaint." Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1092 (2d Cir.1995); Whyte v. Contemporary Guidance Servs., Inc., No. 03 Civ. 5544(GBD), 2004 WL 1497560, at *3 (S.D.N.Y. July 2, 2004). This Court may only dismiss a complaint if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Patel v. Searles, 305 F.3d 130, 135 (2d Cir.2002) (internal quotation marks omitted).
When deciding a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents attached to the complaint as exhibits or incorporated in it by reference. Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir.1993). Both directories, Le Book NY and The Black Book Directory, may be considered because they are referenced in the complaint and are crucial to plaintiff's claims. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002) (determining that documents were properly considered in a motion to dismiss as plaintiff had relied on the documents, and were integral to the complaint). Thus, the Court may consider the two directories in its analysis of the parties' arguments.
II. Copyright Infringement
Plaintiffs basic claim is that defendants copied listings from Le Book NY and included them in The Black Book Directory. Plaintiff asserts that it hired a team of five individuals who researched, selected and collected a vast amount of information that were eventually included in Le Book NY. (Am.Compl.¶22.) To detect any copying, Le Book NY contains several mock company names and addresses (referred to as "seeds"). These seed entries were then found listed in The Black Book Directory. While plaintiff has invested time, energy and money into collecting information appropriate for its directory, it is a basic principle of copyright law that facts cannot be copyrighted, no matter how much effort has been put into discovering and compiling these facts. See 17 U.S.C. § 102(b) ("In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."). The rationale behind this principle stems from the Constitution itself, which explains that the primary objective of copyright is "[t]o promote the Progress of Science and useful Arts," rather than reward the labor of authors. Feist Publ'ns, Inc. v. Rural Tel. Service Co., 499 U.S. 340, 349, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991), quoting U.S. Const. Art. I, § 8, cl. 8. The key distinction is "one between creation and discovery: The first person to find and report a fact has not created the fact; he or she has merely discovered its existence." Feist Publ'ns, 499 U.S. at 347, 111 S.Ct. 1282. To this day, the "originality requirement . . . remains the touchstone of copyright protection today." Id. Therefore, plaintiff's listings of various stylists, photographers, and agencies cannot be copyrighted as they are purely facts and not original creations.
Plaintiff also argues that its directory deserves copyright protection as a "factual compilation." Indeed, "[f]actual compilations . . . may possess the requisite originality" because the "compilation author typically chooses which facts to include, in what order to place them, and how to arrange the collected data so that they may be used effectively by the readers." Id. at 348, 111 S.Ct. 1282. Because the Supreme Court has specifically rejected *309 the "sweat of the brow" or "industrious collection" theories, where copyright protection is a reward for the hard work that went into compiling the facts, id. at 353, 111 S.Ct. 1282, any copyright in a factual compilation is "thin," and "only the compiler's selection and arrangement may be protected; the raw facts may be copied at will." Id. at 350, 111 S.Ct. 1282.
The Copyright Act of 1976 defines a copyrightable compilation as "a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship." 17 U.S.C. § 101. To qualify as a factual compilation, Le Book NY must include: "(1) the collection and assembly of pre-existing material, facts, or data; (2) the selection, coordination, or arrangement of those materials; and (3) the creation, by virtue of the particular selection, coordination, or arrangement, of an `original' work of authorship." Feist Publ'ns, 499 U.S. at 347, 111 S.Ct. 1282. Plaintiff's directory clearly meets the first two requirements. First, Le Book NY is a collection of information about various individuals and companies serving the fashion and creative industry. Second, Plaintiff properly alleges that it selected and arranged the materials for inclusion into the directory, employing a detailed specific process by surveying existing clients, conducting internet research to check "hit rates" on websites, examining portfolios, and reviewing individuals' client lists. (Am.Compl. ¶¶120-126.) Plaintiff has alleged that it had to select from a database of 35,000 of individuals and companies that would be of interest to its audience. (Am. Compl. ¶¶128-131.)
Plaintiff also satisfies the originality requirement of the third prong. The requirement of originality "is not particularly stringent," but it does exist. Feist Publ'ns, 499 U.S. at 358-59, 111 S.Ct. 1282. The arrangement must "order[ or group[ . . . data into lists or categories that go beyond the mere mechanical grouping of data as such, for example, the alphabetical, chronological, or sequential listings of data." Key Publ'ns. Inc. v. Chinatown Today Publ'g Enter., Inc., 945 F.2d 509, 513 (2d Cir.1991). While Le Book NY's listings within categories are arranged alphabetically, plaintiff does more than just alphabetically list all its entries in one lump. Instead, it has divided the listings into nine main categories: hair and make-up stylists; model agencies; photo production, location services, photo labs, and retouchers; rentals; events, luxury hotels; magazines; music & video; fashion; and advertising agencies. (See Am. Compl. ¶¶ 148-63.) See also Key Publ'ns. Inc., 945 F.2d at 514 (finding that the arrangement in a directory of Chinese-American businesses was sufficiently original, as it included categories such as "Bean Curd & Bean Sprout Shops" that were of particular interest to the Chinese-American community). This arrangement required sufficient thought and creativity necessary to meet the originality requirement. Plaintiff has met all three requirements of a factual compilation, and therefore, Le Book NY is entitled to copyright protection.
Nevertheless, plaintiff's claim fails because defendants have not infringed on plaintiff's copyright. To establish infringement, two elements must be shown: (1) possession of a valid copyright, and (2) "copying of those elements of the work that are copyrightable." Id. at 514. As the Second Circuit points out in Key Publications, whether a compilation has been infringed "requires a somewhat more refined analysis than is applied in a case involving a wholly original work." Id. While the test for original works is one of *310 "substantial similarity," when examining a factual compilation, a court must examine the "substantial similarly between those elements, and only those elements, that provide copyrightability." Id. In Key Publications, the court found that a telephone directory targeted to New York City's Chinese-American community did not infringe on a similar directory, despite blatant copying of certain listings, because the arrangement of the two directories were not "remotely similar," and only a small percentage of the defendants' categories overlapped with the plaintiff's categories. Id. at 515.
Here, plaintiff and defendants' directories are also arranged very differently. Le Book NY includes nine main categories, while The Black Book Directory contains ten. Plaintiff points out that The Black Book Directory contains some of the same categories as Le Book NY. (Am. Compl. ¶165.) For example, Le Book NY has a "Hair, Make-up Stylists" category, and The Black Book Directory has a "Stylists" grouping. However, some overlap is bound to happen when producing directories for a similar audience, and this does not automatically lead to a finding of infringement. See id. at 516 ("There are a finite number of businesses that are of special interest to a sizeable segment of [a particular community], and some substantial overlap among classified business directories compiled for that community is inevitable.").
A perusal of the listings under each book demonstrate that the compilations are arranged quite distinctly. Le Book NY includes some categories, such as "Fashion" and "Magazine" that The Black Book Directory does not have. While Le Book NY contains a broad category titled "Rentals," the parallel subcategories listed under "Rentals" are spread among several categories in The Black Book Directory, such as "Supplies & Equipment," "Props & Wardrobe," and "Studios/Sound Stages/Locations." Similarly, listings under Le Book NY's "Photo Production, Location Services, Photo Labs, Retouchers," can be found in three categories in The Black Book Directory, specifically "Pre Press/Photo Labs/Agencies," "Production Co., & Location Services," and "Post Production."
In addition, some subcategories are placed in different groupings. For example, Le Book NY places "Animal Rentals" under the "Rentals" category, while The Black Book Directory has a subcategory titled "Animal Casting" under "Casting/Model/Talent Agencies." Last, each directory has sets of listings that do not exist in the other. For example, Le Book NY contains subcategories "Wigs," "Plant Rentals," "Luxury Accessories," "Perfume & Cosmetic Companies," "Luxury and Boutique Hotels," and "Fashion TV," that Black Book NY does not have. Similarly, The Black Book Directory contains subcategories that do not exist in Le Book NY, such as "Ocean & Marine Equipment," "Art Supplies," "FX Props/Special FX," "Animatronics & Mechanical FX," "Ice," "DVD Authoring & Replications," "Animation, Computer Graphics, & Visual FX," "Film & Tape Storage," and "CD Duplication," among others.
The arrangement of the listings demonstrate that the "organizing principles of the two directories are thus not substantially similar." Key Publ'ns, 945 F.2d at 516. A consumer looking at the two directories would perceive the difference when perusing the table of contents of the two directories. Therefore, defendants' motion to dismiss is granted on plaintiff's copyright infringement claim.
III. Trademark Infringement
Plaintiff brings a claim of trademark infringement, alleging that defendants' *311 directory is confusingly similar to Le Book NY and that defendants' mark infringes on plaintiff's registered trademark. To prevail on a trademark infringement claim, plaintiff must prove that its mark is a protectable trademark and that defendants' use of the mark is likely to confuse consumers as to the source or sponsorship of plaintiff's product. Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir.2000).[2]
In assessing the likelihood of confusion, courts must examine the eight factors set forth in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir.1961), which include: (i) the strength of plaintiff's mark; (ii) the similarity of the parties' marks; (iii) the proximity of the parties' products in the marketplace; (iv) the likelihood that the plaintiff will bridge the gap between the products; (v) actual confusion; (vi) the defendant's intent in adopting its mark; (vii) the quality of the defendant's product; and (viii) the sophistication of the relevant consumer group. Id. at 495. The "evaluation of the Polaroid factors is not a mechanical process where the party with the greatest number of factors weighing in its favor wins. Rather, a court should focus on the ultimate question of whether consumers are likely to be confused." Paddington Corp. v. Attiki Imps. & Distribs., Inc., 996 F.2d 577, 584 (2d Cir.1993) (internal quotation marks and citation omitted).
The "degree of similarity" element here overwhelms any possibility of confusion. In Nabisco, the marks for Dentyne Ice and Icebreakers, brands of chewing gum, were found to be so different as to "create[] distinct marketplace impressions," and thus as a matter of law to create no likelihood of confusion, because each mark utilized different typefaces and different styles, and the chewing gum packaging and shapes were also easily distinguishable. Similarly, plaintiff and defendants here have obviously dissimilar marks. Plaintiff's mark is a black square with white letters, with "LE" horizontally resting on the bottom, and "BOOK" turned 90 degrees, running along the right edge of the square. Defendants' mark has a graphic of a book at the top, and then the words:
THE
BLACK
BOOK
are placed underneath the graphic, with each word on a separate line (as above). As with the gum packets in Nabisco, the directories here are also physically and visually distinct. Le Book NY is a square shape with big spiral binding and a clear acrylic plastic cover. The Black Book Directory is a traditionally bound book, rectangular in shape. The books' formats, typefacing, paper, and even the placement of advertising are all noticeably dissimilar.
The only word in common in the marks is "Book," which is an unregistrable component of the mark. The word "book" is a generic term and cannot be registered as a trademark. See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir.1976) ("[N]o matter how much money and effort the user of a generic term has poured into promoting the sale of its merchandise and what success it has achieved in securing public identification, it cannot deprive competing manufacturers of the product of the right to call an article by its name."). In fact, defendants note that the *312 registrant of the "Le Book" mark includes a disclaimer for the word "book" from trademark protection, pursuant to 15 U.S.C. § 1056(a). The cumulative effects of the dissimilarity of the marks and the form, look and feel of the directories dispels any confusion consumers might have. Therefore, plaintiffs claim for trademark infringement fails as a matter of law.
IV. False Designation of Origin and Repackaging Claims under the Lanham Act
Plaintiff brings a claim for false designation of origin, pursuant to Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). The purpose of § 1125(a) "is to prevent consumer confusion regarding a product's source . . . and to enable those that fashion a product to differentiate it from others on the market." Centaur Communications v. A/S/M Communications, Inc., 830 F.2d 1217, 1220 (2d Cir. 1987). A false designation of origin claim can either be an allegation of passing off (also known as "palming off'), where the producer misrepresents its goods or services as someone else's, or "reverse passing off," when the producer misrepresents someone else's goods as its own. Dastar v. Twentieth Century Fox, 539 U.S. 23, 28 n. 1, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003).[3]
A plaintiff bringing a false designation of origin claim must demonstrate that the defendants:
on or in connection with any goods . . . use[d] in commerce . . . any false designation of origin . . . which . . . is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person. . . . 15 U.S.C. § 1125(a).
The test used for false designation of origin utilizes the same principles and standards as are used for trademark infringement. See Bi-Rite Enters., Inc. v. Button Master, 555 F.Supp. 1188, 1192-93 (S.D.N.Y.1983), quoting New West Corp. v. NYM Co. of Cal., Inc., 595 F.2d 1194, 1201 (9th Cir.1979) ("Whether we call the violation infringement, unfair competition or false designation of origin, the test is identical."). As discussed above, however, as a matter of law, Le Book NY and The Black Book Directory are so dissimilar that it is unlikely that a consumer would confuse one with the other, or mistakenly believe that both directories were published by either the plaintiff or defendant. Therefore, plaintiff fails to state a claim for false designation of origin and repackaging.
V. Trademark Dilution
Plaintiff asserts a claim of trademark dilution under New York state law. Trademark dilution statutes protect the ability of a plaintiffs mark to serve as a "unique identifier" if it is weakened because the "relevant public now associates that designation with a new and different source." The Sports Auth., Inc. v. Prime Hospitality Corp., 89 F.3d 955, 965-66 (2d Cir.1996). Defendants argue that plaintiffs New York state law claim for trademark dilution is foreclosed by the Federal Trademark Act, 15 U.S.C. § 1125(c)(3), which provides:
*313 The ownership by a person of a valid registration . . . or on the principal register shall be a complete bar to an action against that person, with respect to that mark, that is brought by another person under the common law or a statute of a State and that seeks to prevent dilution of the distinctiveness of a mark, label, or form of advertisement.
While a serious question of preemption is raised, the Court is wary of deciding a question of federalism which has not been fully briefed. One district court cited some legislative history indicating that the Federal Trademark Dilution Act enacted in 1995 was not intended to pre-empt existing state dilution statutes. See Ringling Brothers-Barnum & Bailey Combined Shows, Inc. v. B.E. Windows Corp., 937 F.Supp. 204, 208-09 (S.D.N.Y.1996), citing H.R.Rep. No. 104-374, at 4 (1995), reprinted in 1996 U.S.S.C.A.N. 1029, 1031 ("[T]he Act was not intended to `pre-empt existing state dilution statutes. . . . [A] federal dilution statute should . . . coexist with state dilution law.'"). Moreover, in Fed. Express Corp. v. Fed. Espresso, Inc., 201 F.3d 168 (2d Cir.2000), the Second Circuit analyzed plaintiffs trademark dilution claims under both the Federal Trademark Act and New York state law. Id. at 174-75.
Nonetheless, defendants' motion to dismiss on plaintiffs trademark dilution claim must be granted for other reasons. In order to establish a dilution claim, two elements must be shown: (1) ownership of a distinctive mark; and (2) a likelihood of dilution. Hormel Foods Corp. v. Jim Henson Productions, Inc., 73 F.3d 497, 506 (2d Cir.1996). In "keeping with the original intent of the [New York] statute, the similarity [between the marks] must be substantial before the doctrine of dilution may be applied." Mead Data Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1029 (2d Cir.1989). See also Fed. Express Corp., 201 F.3d at 176 ("The marks must be of sufficient similarity so that, in the mind of the consumer, the junior mark will conjure an association with the senior [mark, therefore] lessen[ing] the distinctiveness of the senior mark.") (internal citations omitted). As discussed above, the parties' marks and directories are blatantly different, and thus plaintiff fails to meet a critical requirement of a dilution claim.
Plaintiff alleges that The Black Book Directory "is a cheap imitation of [p]laintiffs [c]opyrighted work." The advertisements included in [The Black Book Director] are of inferior quality, and the directory itself is cheaply made with lowergrade resources. (Am.Compl. ¶30.) The type of dilution claim plaintiff appears to be bringing is for "tarnishment," when a trademark is "linked to product of shoddy quality, or is portrayed in an unwholesome or unsavory context," Deere & Co. v. MTD Products, Inc., 41 F.3d 39, 43 (2d Cir. 1994), so that "plaintiffs mark will suffer negative associations through defendant's use." Hormel, 73 F.3d at 507. However, defendant has not used plaintiffs mark. When a consumer looks at two different travel guidebooks, such as the Lonely Planet and the Rough Guide, describing the same location, she understands that the books are products of two different publishers, and does not think less of the Lonely Planet because the Rough Guide uses recycled paper. Similarly, a consumer looking at Le Book NY and/or The Black Book Directory will no doubt understand that they are two different publications, and will not think less of Le Book NY based on the presentation of The Black Book Directory. Thus, plaintiff fails to meet the similarity requirement for a dilution claim.
*314 CONCLUSION
Defendants' motion to dismiss is granted on all of plaintiff's claims.
SO ORDERED.
NOTES
[1] Plaintiff also includes claims for "Impoundment and Injunctive Relief" (Am. Compl. ¶¶ 190-96), and "Costs and Attorneys' Fees." (Am.Compl. ¶¶ 201-03.) These claims are not substantive causes of action, but are forms of relief, and therefore are not proper claims.
[2] Defendants argue that plaintiff is not the actual registrant of the trademark because the registration is in the name of Le Book Editions, a French corporation located in Paris. (D.Mem.6-7.) However, the Court need not determine the validity of the trademark registration at this time because defendants concede (for purposes of this motion only) that plaintiff has a valid trademark. (D. Reply 11.)
[3] Plaintiff brings a false designation of origin claim and a separate claim of repackaging under the Lanham Act. A repackaging claim is the same as "reverse passing off," which stems from a broadened interpretation of a false designation of origin claim. See Dastar, 539 U.S. at 30, 123 S.Ct. 2041 ("The Trademark Law Revision Act of 1988 made clear that § 43(a) [of the Lanham Act] covers origin of production as well as geographic origin . . . [and][i]ts language is amply inclusive . . . of reverse passing off.").
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51 So.3d 729 (2010)
Duane DUNNAHOE and Virginia Dunnahoe
v.
Gregory HARMON, et al.
No. 2010-CC-2293.
Supreme Court of Louisiana.
December 10, 2010.
Denied.
CLARK, J., would grant.
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299 F.Supp.2d 529 (2004)
Minnie Kelly HUNT, William G. Hunt, Kathryn McCoy, and Sunset Beach Taxpayers' Association, Plaintiffs,
v.
NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, Lyndo Tippett, North Carolina Highway Administration, Len A. Sanderson, United States Department of Transportation, Normany Y. Mineta, Federal Highway Administration, and Mary E. Peters, Defendants, and
Town of Sunset Beach, Defendant-Intervenor.
No. 7:02-CV-45-H(1).
United States District Court, E.D. North Carolina, Southern Division.
January 7, 2004.
*530 *531 James B. Maxwell, Maxwell, Freeman & Bowman, Durham, NC, for plaintiffs.
Frederick C. Lamar, N.C. Attorney General Office, Lisa C. Glover, N.C. Department of Transportation, Attorney General's Office, R.A. Renfer, Jr., Asst. U.S. Attorney, Office of U.S. Attorney, Raleigh, NC, James C. Thomason, III, Federal Highway Administration, Atlanta, GA, Amos C. Dawson, III, Maupin, Taylor, Ellis & Adams, Raleigh, NC, for defendants.
ORDER
MALCOLM J. HOWARD, District Judge.
This matter is before the court on the parties' cross-motions for summary judgment. The parties have responded appropriately, and this matter is ripe for adjudication.
STATEMENT OF THE CASE
Plaintiffs initiated this suit by filing a complaint on March 27, 2002, against defendants United States Department of Transportation, Federal Highway Administration (FHWA) and the named officials thereof (collectively, "federal defendants") as well as defendants North Carolina Department of Transportation (NCDOT) and the named officials thereof (collectively, "state defendants"). The complaint alleged that, in connection with the federal and state defendants' decision to replace the existing single lane, floating pontoon draw bridge at Sunset Beach, North Carolina, with a new high-level, fixed-span bridge, the federal and state defendants had violated the National Environmental Policy Act (NEPA), 42 U.S.C. § 4321 et seq., the North Carolina Environmental Policy Act (NCEPA), N.C.G.S. § 113A-1, et seq. and Section 4(f) of the Department of Transportation Act of 1966, 49 U.S.C. § 303.
On July 23, 2002, the Town of Sunset Beach moved to intervene as a defendant in this action. By order dated September 4, 2002, this court allowed the town's request.
On September 3, 2002, this court agreed to allow this case to proceed upon the administrative record, a copy of which has been filed with the court.
*532 In 1979, the NCDOT began considering options for replacement of the single lane pontoon bridge that presently joins the mainland of Sunset Beach to the island of Sunset Beach. The bridge replacement project is identified as project number B-682 in NCDOT'S current Transportation Improvement Program (TIP).
During the 1980s, defendants prepared an Environmental Assessment (EA) and made a Finding of No Significant Impact (FONSI) for the bridge project, stating that the construction would not have any significant impact on the human environment. In reliance on this finding, NCDOT began making right-of-way acquisitions, had design plans drawn, and advertised for construction bids. In 1990, a group of citizens, including all the plaintiffs in the instant case, filed suit in this district. In lieu of a preliminary injunction, the defendants voluntarily agreed not to proceed with the construction project or contract until the court ruled on plaintiffs' complaint.
After hearing evidence from several experts on the strong correlation between growth and development of an island and accessibility to the island, the negative impact that significant increased development would have on the recreational uses of the island, and the potential effects on populations of several endangered species in the area, the Honorable W. Earl Britt enjoined defendants from building a new bridge at Sunset Beach until an adequate Environmental Impact Statement (EIS) and Section 4(f) finding were prepared in accordance with applicable law and regulations. See Mullin v. Skinner, 756 F.Supp. 904 (E.D.N.C.1990). The order stated that proceeding with the construction of a high-rise bridge without first completing an EIS was inconsistent with the intent of the National Environmental Protection Act (NEPA) and was "arbitrary and capricious." The court found that the beach is a section 4(f) resource and that the project would make "use" of the beach. The project was enjoined until defendants prepared and circulated "an adequate environmental impact statement identifying and discussing in detail the direct, indirect, and cumulative impacts of and alternatives to the proposed project in accordance with the National Environmental Policy Act of 1969" and until the defendants fully complied with the Section 4(f) requirements. Id. at 925.
In July 1995, the defendants published a Draft Environmental Impact Statement (DEIS), which was circulated for comment. The DEIS also supported the construction of a 65-foot fixed span, high-rise bridge. The Final Environmental Impact Statement (FEIS) was published and circulated for comment on October 27, 1997. On August 27, 1999, the Record of Decision (ROD) was published, adopting the recommendation of Alternative W1R (a 65-foot fixed span bridge). At that point, the federal and state defendants moved to dissolve the injunction. The court entered an order dissolving the injunction, with the understanding that plaintiffs would be allowed to file a new suit and challenge the "adequacy" of the EIS. The present suit does just that. Believing that the ROD was based on an inadequate EIS, the plaintiffs filed this action on March 27, 2002.
STATEMENT OF THE FACTS
The Town of Sunset Beach is located in Brunswick County, North Carolina, and consists of both the island of Sunset Beach and a mainland community. The island is the smallest inhabited barrier island on the North Carolina coast, approximately 1.7 miles long and one-half mile wide at its widest point. The bridge, a single lane, floating pontoon swing bridge, crosses the *533 Atlantic Intracoastal Waterway (AIWW) and connects the island of Sunset Beach to the mainland. Built in 1953, the bridge has been maintained by NCDOT since 1961. The bridge is called a pontoon bridge because it has a floating steel barge with a swing-span draw bridge and fixed wooden approach spans. This type of bridge requires extensive repairs and numerous replacements of parts. In May 1996, the bridge received a sufficiency rating of 7.3 on a scale of 100, with 100 being perfect condition. Due to the structural deficiencies of the bridge, decreased maximum load limits have been placed on bridge traffic. FEIS 1-9, AR 4992. When the bridge is in the closed position, only small john boats can pass under the bridge. From April 1 to November 30, the bridge opens on demand for commercial vehicles and on the hour for pleasure craft. The bridge opens on demand for all vessels the rest of the year. Opening the bridge, allowing one vessel to pass, and closing the bridge takes about ten minutes. This process means that, especially during the peak summer season, motorists and boaters can expect delays.
In their briefs, plaintiffs emphasize the family atmosphere of Sunset Beach island. They talk about the relatively few commercial establishments, the fishing pier, and the single family/duplex residences built on the island. They note the building height restriction of 35 feet for all structures on the island. In their view, this development style has been partially dictated by the access to the island via the pontoon bridge. The pontoon bridge is also an advertising tool for tourism in Sunset Beach, and is featured on a website advertising Sunset Beach.[1]
The FEIS selected "Alternative W1R," a high-level fixed span bridge to be located approximately 150 feet west of the existing bridge, as the preferred alternative. See FEIS 2-12, 2-16, AR 5030, 5034. W1R is a revision of W1, shifting the alignment of the bridge eastward to minimize the impacts of dredging and to avoid the relocation of the Big Narrows channel.
After the FEIS was issued, the defendants agreed to conduct a re-evaluation process, considering an additional alternative, known as W1R2, a mid-level bascule bridge similar to Alternative C4 discussed in the FEIS, but to be built along the same alignment as W1R. See ROD 5, AR 7001. However, the agency ultimately chose W1R as the preferred alternative.
COURT'S DISCUSSION
I. Standard of Review
Summary judgment is appropriate pursuant to Fed.R.Civ.P. 56 when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Once the moving party has met its burden, the non-moving party may not rest on the allegations or denials in its pleading, see Anderson, 477 U.S. at 248, 106 S.Ct. 2505, but "must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. *534 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e)).
In this case, this court must review the decision of the agency. As such, this court's focus will be on the administrative record. Review of the administrative record is primarily a legal decision, readily resolvable by summary judgment. Citizens for Scenic Severn River Bridge, Inc. v. Skinner, 802 F.Supp. 1325, 1332 (D.Md. 1991).
II. NEPA
NEPA establishes "a national policy of protecting and promoting environmental quality." Hodges v. Abraham, 300 F.3d 432, 438 (4th Cir.2002), quoting Hughes River Watershed Conservancy v. Glickman, 81 F.3d 437, 443 (4th Cir.1996). NEPA is a procedural statute, meaning that it does not place substantive requirements on federal agencies, but it does require them to follow certain procedures prior to taking certain actions. Id. In Mullin v. Skinner, Judge Britt held that NCDOT's decision not to prepare an EIS was arbitrary, capricious, and a clear error of judgment. See Mullin v. Skinner, supra. That issue, however, is no longer before the court. The current issue is whether the FEIS that defendants have prepared is adequate.
The purpose of NEPA is two-fold. First, it ensures that an "agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts." In other words, NEPA guarantees that an agency will take "a `hard look' at environmental consequences" before making a decision that may affect the environment. (Citations omitted.) Second, compliance with NEPA procedures "ensures that relevant information about a proposed project will be made available to members of the public so that they may play a role in both the decisionmaking process and the implementation of the decision." (Citations omitted.)
Hodges, supra at 438.
While NEPA requires that the agency follow the proper procedures, e.g., preparing an EIS, once these procedures are completed adequately, i.e., "`the adverse environmental effects of the proposed action are adequately identified and evaluated,' a federal agency is entitled to `decide that other values outweigh the environmental costs.'" Id., quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989). In other words, the agency's decision cannot be uninformed, even if it is unwise. Id. Therefore, the court cannot "interject itself within the area of discretion of the executive as to the choice of the action to be taken." Mullin v. Skinner, supra at 919, quoting Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21, 96 S.Ct. 2718, 49 L.Ed.2d 576 (1976).
Judicial review of an agency decision made pursuant to NEPA is dictated by the Administrative Procedure Act (APA) § 706(2)(A). 5 U.S.C. § 706(2)(A); see Jersey Heights Neighborhood Ass'n v. Glendening, 174 F.3d 180, 186 (4th Cir. 1999).
The standard provided by the APA is whether an agency decision was "arbitrary, capricious, an abuse or discretion or otherwise not in accordance with law." Mullin v. Skinner, supra at 919.
A decision is arbitrary and capricious
if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is *535 so implausible that it could not be ascribed to a difference in view or the product of agency expertise.
Id., quoting Motor Vehicle Mrs. Ass'n of the United States v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983).
NEPA provides the agency with requirements for reports on federal actions, such as this one, which significantly affect the quality of the human environment.
The agency must:
include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on
(i) the environmental impact of the proposed action,
(ii) any adverse environmental effects which cannot be avoided should the proposal be implemented,
(iii) alternatives to the proposed action,
(iv) the relationship between local short-term uses of man's environment and the maintenance and enhancement of long-term productivity, and
(v) any irreversible and irretrievable commitment of resources which would be involved in the proposed action should it be implemented.
42 U.S.C. § 4332(2)(c).
A. Choice of Comparison Sites for Land Use Study
Plaintiffs allege several ways in which the FEIS is inadequate. First, plaintiffs claim that the defendants chose the wrong bridges to study as comparisons to the proposed Sunset Beach bridge project. The study, found in the AR, looked at development prior to and after the building of new bridges at Ocean Isle Beach and Holden Beach, both located in Brunswick County along with Sunset Beach. Plaintiffs, however, claim that defendants should have used the Topsail Island bridge project and the Bogue Banks bridge project as comparisons for the direct and indirect effects a new bridge at Sunset Beach will have on land use. In support of their argument, plaintiffs note that Ocean Isle and Holden Beach are three to four times larger than Sunset Beach, that both already had bascule bridges prior to the new high rise bridges being built, and that both already had substantial commercial development.
There is little to no mention of either the Bogue Banks project or the Topsail Island project in the AR, despite the fact that Judge Britt said that "the examples set by North Topsail Beach and the west end of Bogue Banks portends large-scale future development if the bridge becomes a reality." Mullin v. Skinner, 756 F.Supp. At 921.
Defendants state that the Topsail Island and Bogue Banks projects are not good comparisons, and they therefore did not study these projects. See AR 3187-89. They note that both projects are more than 100 miles away from Sunset Beach and that neither was a bridge-to-bridge replacement, as in the case of Sunset Beach. The bridge to Topsail Island established a new transportation linkage, while the Bogue Banks bridge replaced an existing ferry. They compare this to Ocean Isle which has an existing two-lane swing bridge and Holden Beach, which had a one lane swing bridge. They also note that although Ocean Isle and Holden Beach are both larger than Sunset Beach, neither has substantial commercial development (1-2%). AR 3197. The AR shows that Sunset Beach actually had a greater concentration of commercial development prior to a new bridge being constructed *536 than did Ocean Isle or Holden Beach. However, this may be attributable to the smaller size of Sunset Beach and the need for certain commercial establishments on the island due to limited access to the mainland.
Plaintiffs ask the court to find the defendants' FEIS inadequate because of the comparison study sites they chose. However, on these facts, this court cannot and will not do so. Although the sites chosen may not be identical in every way to Sunset Beach and although the islands cited by Judge Britt in the earlier decision were not chosen by the agency for study, the choice of comparable sites was not arbitrary and capricious. It appears that the agency took a "hard look" at the Sunset Beach bridge project effects by choosing two sites, Ocean Isle and Holden Beach, and gathering comparison data from those sites. Agencies are free "to select their own methodology as long as that methodology is reasonable." Hughes River Watershed Conservancy v. Johnson, 165 F.3d 283, 289 (4th Cir.1999). This court must and will give deference to the agency's decision, provided it is reasonable, as it appears to be here. Id.
B. Traffic Projections
Plaintiffs also claim that the traffic projections in the FEIS are flawed. The FEIS predicts a 100% increase in traffic by 2019, which plaintiffs interpret to mean either there will be more multifamily structures built on the island to accommodate more residents or there will be more day visitors to Sunset Beach Island. If this is true, plaintiffs claim defendants should have analyzed more thoroughly storm water runoff and sewage issues as well as commercial development effects on the environment.
Defendants admit that the traffic increase is due partially to an increase in day visitors to the island. However, the FEIS concludes that the bridge project itself is not likely to affect the rate/type of development on the island or the number of day visitors. Defendants believe, based on their findings, that the number of day visitors will increase at all the southeastern North Carolina beaches regardless of the type of bridge structures the islands have. They also note that this increase in visitors will lead to more commercial development, but they believe that none of these effects are directly caused by the bridge project.
However, the FEIS did consider, at least to some extent, the effects of (1) a full build out of the island, (2) the installation of sewer system, (3) population growth, and (4) increased day visitors. FEIS 4-83; AR 5226. The FEIS also considered stormwater and sewer issues and determined that stormwater discharged directly from the bridge will be properly controlled. See AR 3414; FEIS S-31, 7-23; AR 4962, 5292.
Even though the defendants' analysis may not satisfy the plaintiffs, it appears from the AR and the FEIS that defendants took a "hard look" at the effects the bridge would have on the environment, including secondary development effects. The agency's decision cannot be said to be arbitrary and capricious. Therefore, it is not this court's job to determine the wisdom of the path (or bridge) chosen by defendants. Having found that the agency took a "hard look" at the effects of the bridge project, the FEIS is deemed adequate and the agency has complied with NEPA.
III. Section 4(f)
Section 4(f) of the Department of Transportation Act of 1996, now codified at 49 U.S.C. § 303, provides that:
*537 The Secretary shall not approve any program or project which requires the use of "publicly owned land of a public park, recreation area, or wildlife and waterfowl refuge of national, State, or local significance, or land of an historic site of national State or local significance" unless "(1) there is no prudent and feasible alternative to using that land; and (2) the program or project includes all possible planning to minimize harm to the park, recreation area, wildlife and waterfowl refuge, or historic site resulting from the use."
Maryland Wildlife Federation v. Dole, 747 F.2d 229, 233 (4th Cir.1984).
Section 4(f) is applicable in this case because the beach on the island of Sunset Beach is § 4(f) property. See Mullin v. Skinner, supra (defendants admitted and Judge Britt accepted as a binding judicial admission that the beach is § 4(f) protected property.) Plaintiffs claim that under § 4(f) defendants should be required to build a mid-level bascule bridge instead of the high-level bridge because the mid-level bridge is a prudent and feasible alternative.
In reviewing an agency determination under § 4(f), the reviewing court is "to engage in a substantial inquiry." Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 28 L.Ed.2d 136. The decision is entitled to "a presumption of regularity." Id. But the court should still engage in a "thorough, probing, in-depth review." Id.
The court in Overton Park identified three factors that a reviewing court should consider: whether the Secretary acted within the scope of his authority and then whether the decision was arbitrary, capricious, an abuse of discretion, or not in accordance with law. Id. In determining whether the Secretary acted within the scope of his authority, the reviewing court must find "that the Secretary could have reasonably believed that there were no feasible and prudent alternatives." Hickory Neighborhood Defense League v. Skinner, 910 F.2d 159, 162. In determining whether the decision was arbitrary and capricious, "the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Overton Park, 401 U.S. at 416, 91 S.Ct. 814.
The Court in Overton Park also noted that "although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency." Id.
Plaintiffs claim that § 4(f) requires defendants to choose the mid-level bridge because it is a feasible and prudent alternative which meets the need for the project and has less impact on the environment than the high-level alternative which was chosen. Without a citation to the over 7,000-page AR, the plaintiffs rely on a 1996 report that plaintiffs believe demonstrates the preferability of the 35-foot bascule bridge. They also direct the court to some photos and computer simulations of the proposed bridges from various angles. However, none of these photos is taken from the § 4(f) protected property at issue, the beach. The court notes that the protected property at issue is not the island of Sunset Beach or the Town of Sunset Beach, but the beach itself. As such, the photos taken from various other view-points on the island and the mainland are irrelevant in the § 4(f) determination.
Defendants did determine that both the mid and high-level bridges would meet the project's needs: safety and ease of access. However, the environmental studies found that there are no feasible and prudent *538 alternatives to using the § 4(f)-protected resources. The no-build alternatives, including the rehabilitation alternative, did not meet the needs of the project; therefore, they were not feasible and prudent. The study found that all of the build alternatives have the same impact on the beach.
It is important to understand the meaning of "use" in § 4(f). Section 4(f) prohibits the "use" of historic and cultural resources except where there is no feasible and prudent alternative and where all possible planning has been conducted to minimize harm to the protected property. There are two types of use: direct and constructive. A direct use occurs "when land is permanently incorporated into a transportation facility," and a constructive use occurs when "the project's proximity impacts are so severe that the protected activities, features, or attributes that qualify a resource for protection under section 4(f) are substantially impaired." 23 C.F.R. § 771.135(p)(1)(i), (p)(2). Substantial impairment occurs when the "protected activities, features, or attributes of the resource are substantially diminished." 23 C.F.R. § 771.135(p)(2).
As noted above, Mullin v. Skinner, supra, established that the bridge replacement project constituted a constructive use of the beach. Therefore, the agency made § 4(f) findings, as required. After determining that there were no direct uses of any § 4(f) resources, the defendants analyzed all constructive uses and impacts including traffic, noise, visual impact, development, and increased beach usage. See FEIS 4-95, AR 5238. The study determined that all the build alternatives had the same level of impairment to the protected § 4(f) resources. It also determined that none of the build alternatives would cause a substantial visual impairment of the activities, features, and attributes of the beach.
The Secretary reasonably believes there are no feasible and prudent alternatives to using the protected 4(f) property. All of the alternatives that meet the needs and purpose of the project use the beach in the same way. None of these alternatives cause a substantial visual impairment of the activities, features, and attributes of the beach. Plaintiffs disagree with defendants as to the aesthetic effects the alternatives will have on the island and Town of Sunset Beach, not on the beach itself. This disagreement is not one the court can become entangled in. See Citizens for Scenic Severn River Bridge v. Skinner, 802 F.Supp. 1325, 1334 (D.Md.1991). The agency has demonstrated through the AR and the ROD that they have taken "serious consideration of the appropriate factors," and as such, "this court is empowered only to accept the agency's determinations." Id. Therefore, the agency's determination is not arbitrary and capricious, and it meets the requirements of § 4(f).
CONCLUSION
For the foregoing reasons, defendants' motion for summary judgment is granted and plaintiffs' motion for summary judgment is denied. The clerk is directed to close the case.
NOTES
[1] Plaintiffs state the bridge is pictured on Sunset Beach's website. The bridge is featured on the website www.sunsetnc.com which is a town website featured on www.coastalnc.com. However, the official Town of Sunset Beach website, www.townofsunsetbeach.com, does not feature the bridge.
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535 U.S. 971
CITY OF PARMAv.CLEVELAND BRANCH, NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE, ET AL.
No. 01-1106.
Supreme Court of the United States.
April 1, 2002.
1
C. A. 6th Cir. Certiorari denied. Reported below: 263 F. 3d 513.
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901 F.2d 654
UNITED STATES of America, Appellee,v.Samuel Joe PFEFFER, Appellant.
No. 89-5016.
United States Court of Appeals,Eighth Circuit.
Submitted Sept. 13, 1989.Decided April 10, 1990.
Dennis C. Whetzal, Rapid City, S.D., for appellant.
Robert A. Mandel, Rapid City, S.D., for appellee.
Before JOHN R. GIBSON, and WOLLMAN, Circuit Judges, and ROSS, Senior Circuit Judge,
WOLLMAN, Circuit Judge.
1
Samuel Joe Pfeffer appeals his conviction for distribution of methamphetamine, in violation of 21 U.S.C. Sec. 841(a)(1). We affirm.
I.
2
Viewed in the light most favorable to the verdict, the evidence established that on October 29, 1987, Pfeffer, who was then employed as a truck driver for a South Dakota firm, stopped at a gas station in Pine Ridge, South Dakota, while enroute to Montana from Nebraska. Pfeffer began looking for water to fill his radiator. Dean Zephier, a paid government informant, hailed Pfeffer, claiming that he recognized Pfeffer from Pfeffer's home town of Lake Andes, South Dakota. Zephier brought up the topic of drugs, saying that he had some marijuana and "mushrooms" to sell. Zephier asked Pfeffer if he had any methamphetamine, commonly called "crank" or "speed." Pfeffer said that he did and that he had just bought $500.00 worth of crank. Zephier then asked Pfeffer to sell him some, to which Pfeffer replied that he would.
3
Zephier asked Pfeffer to wait at the gas station while he went to his house to get drugs and talk to his "old lady." Pfeffer asked Zephier whether he was going to "get the cops." Zephier assured him that he was not. Zephier then went to meet Federal Bureau of Investigations Agent Rick Esselbach, with whom he had been working. Zephier put on a body recorder, and he and Esselbach returned to the gas station five to ten minutes after Zephier had left. Pfeffer was pulling out of the gas station as they returned. Zephier and Esselbach followed Pfeffer's truck for a distance of several blocks until Pfeffer pulled over.
4
Zephier got out of the car and joined Pfeffer in the cab of Pfeffer's truck, where the two had a twenty to thirty minute conversation, recorded by Zephier's body recorder. Early on during this conversation, in response to Zephier's statement that he had been "[d]rugg'n heavy," Pfeffer asked, "You got any fucking narcs on the reservation around here?," and went on to say, "Fuckin' tired of narcs, can't fuckin' stand it." Zephier again offered to sell Pfeffer drugs, but Pfeffer refused. Zephier asked Pfeffer about buying some methamphetamine and told Pfeffer that he was not a "narc." Pfeffer said he did not want to be involved and that he did not "sell the bullshit like that." He asked, however, if Zephier knew where he could sell some bad quality crank. Pfeffer also said that he could get some "primo weed" if Zephier gave him the money up front. Throughout the conversation, Pfeffer offered Zephier some methamphetamine to try on the spot. Zephier initially refused, but then pretended to use the drug. Towards the end of the conversation, Pfeffer sold Zephier eight-tenths of a gram of methamphetamine.
5
Esselbach arrested Pfeffer in Lake Andes, South Dakota, on July 4, 1988. Esselbach asked Pfeffer if he had any weapons with him. Pfeffer said that he did and removed an automatic handgun from a suitcase in his van.
6
At trial, Pfeffer asserted the affirmative defense of entrapment. The jury rejected this defense, however, and convicted Pfeffer of distributing methamphetamine. The district court sentenced Pfeffer to thirty months' imprisonment, with a special parole term of three years.
7
Pfeffer challenges his conviction on two grounds. First, he contends that the district court1 should have found entrapment as a matter of law. Second, Pfeffer challenges the district court's admission of evidence concerning the gun surrendered by Pfeffer at the time of his arrest.II.
8
Entrapment is an affirmative defense which consists of two elements: government action to induce or otherwise cause the defendant to commit the crime, and the defendant's lack of predisposition to commit the crime. United States v. Foster, 815 F.2d 1200, 1201 (8th Cir.1987). The policy behind the defense is that law enforcement officers and their agents should be involved in detecting and preventing crime, not in manufacturing it. Id. at 1202; see Lopez v. United States, 373 U.S. 427, 434, 83 S.Ct. 1381, 1385, 10 L.Ed.2d 462 (1963); Sherman v. United States, 356 U.S. 369, 372, 78 S.Ct. 819, 820, 2 L.Ed.2d 848 (1958). The entrapment defense does not, however, preclude undercover law enforcement operations that use stealth, strategy or deception to trap an unwary criminal, or which provide a defendant with an opportunity or facility to commit the crime. Sherman, 356 U.S. at 372, 78 S.Ct. at 820; United States v. Lard, 734 F.2d 1290, 1293 (8th Cir.1984). Entrapment occurs "only when the Government's deception actually implants the criminal design in the mind of the defendant...." United States v. Russell, 411 U.S. 423, 436, 93 S.Ct. 1637, 1645, 36 L.Ed.2d 366 (1973). "The key question is therefore whether the government agent caused or induced the defendant to commit a crime he was not otherwise predisposed--i.e. willing and ready--to commit whenever a propitious opportunity arose." Lard, 734 F.2d at 1293.
9
The question of entrapment is ordinarily for the jury. United States v. Williams, 873 F.2d 1102, 1104 (8th Cir.1989). For Pfeffer to prevail in his contention that the trial court should have granted his motion for judgment of acquittal, he must show entrapment as a matter of law. United States v. King, 803 F.2d 387, 389 (8th Cir.1986); United States v. Resnick, 745 F.2d 1179, 1186 (8th Cir.1984). To establish entrapment as a matter of law, the evidence must clearly indicate (1) that a government agent originated the criminal design; (2) that the agent implanted in the mind of an innocent person the disposition to commit the offense; and (3) that the defendant committed the criminal act at the urging of the government agent. Williams, 873 F.2d at 1104; United States v. Shaw, 570 F.2d 770, 772 (8th Cir.1978). When reviewing a district court's denial of motion for acquittal, we must view the evidence in the light most favorable to the government. Williams, 873 F.2d at 1104.
10
It is true that there were inconsistencies between Zephier's direct and cross-examination testimony. Although on direct examination Zephier claimed that Pfeffer said he would sell crank to Zephier, Zephier appeared to admit on cross-examination that Pfeffer had not told Zephier his crank was for sale and that the only drugs offered for sale during the gas station conversation were the marijuana and mushrooms Zephier offered to Pfeffer. These inconsistencies were for the jury to resolve, however, and we cannot say that they compel a finding that Pfeffer manifested no predisposition to sell drugs. Likewise, the fact that Pfeffer decided to resume his journey without waiting for Zephier to return after talking to his "old lady" was for the jury to take into account in weighing the evidence concerning Pfeffer's predisposition. In making this determination, the jury had before it the evidence of Pfeffer's question regarding the presence of "narcs" and his professed hatred for narcs, hardly the comments of one who has had no involvement whatsoever with illegal drugs. The jury also had before it Pfeffer's admission during cross-examination that he had been using amphetamines for "a couple of years" and he was willing to give some crank to Zephier, although he denied any intention to sell the crank to Zephier.
11
The issue resolves itself to how far the government may go in utilizing undercover agents to obtain evidence of criminal activity. At some point the government's efforts can cross the line from a legitimate inquiry of those predisposed to commit a crime to an impermissible instigation of illegal conduct by those not otherwise disposed to break the law, at which point entrapment occurs as a matter of law. Here, the government's efforts brought it perilously near that line. Nevertheless, Pfeffer had methamphetamine in his possession and, if Zephier's testimony is believed, indicated a willingness, if not an eagerness, to sell it. Accordingly, we hold that the government's conduct did not constitute entrapment as a matter of law.
12
We agree with Pfeffer that the trial court should not have admitted the testimony concerning the gun that was in the suitcase in Pfeffer's van at the time he was arrested. By no stretch of the imagination can it be said that the gun was even remotely connected with the drug offense that occurred nearly a year earlier. Likewise, there is no evidence that Pfeffer was involved in ongoing drug transactions and thus used the weapon as a tool of the trade. Nevertheless, the record reveals that little was made of the gun in the government's presentation of its case, and we therefore hold that the error in admitting it was harmless.
13
The judgment of conviction is affirmed.
1
The Honorable Richard H. Battey, United States District Judge for the District of South Dakota
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562 N.W.2d 299 (1997)
STATE of Minnesota, Respondent,
v.
Anthony SOTO, Petitioner, Appellant.
No. C3-95-577.
Supreme Court of Minnesota.
April 24, 1997.
*301 John M. Stuart, Minnesota State Public Defender, Charlann Winking, Assistant State Public Defender, Minneapolis, for Appellant.
Susan Gaertner, Ramsey County Attorney, Darrell C. Hill, Assistant Ramsey County Attorney, St. Paul, for Respondent.
OPINION
TOMLJANOVICH, Justice.
This case challenges the use of the Hernandez method in calculating defendant Anthony Soto's criminal history score for the purposes of sentencing him on four separate sales of cocaine to an undercover police officer, which all occurred within the period of approximately one month. We affirm the court of appeals on its determination that the use of the Hernandez method was appropriate in this case.
In February 1993, Soto first met an informant and a police officer who were both working undercover at the time. The informant asked Soto about drugs, but Soto replied that he was not involved in the sale of drugs at that time. After this initial conversation, the informant called Soto approximately three times to discuss a purchase of cocaine. Soto testified that although he was not involved in the sale of drugs at the time, he agreed to try to locate some cocaine for the informant because Soto was in bad financial shape.
Soto subsequently agreed to meet the informant and the undercover police officer in a parking lot on February 8, 1993, at which time the officer informed Soto that he had $1,300 for an ounce of cocaine. Soto left the area for five minutes and returned with a bag containing 27 grams of cocaine, which he exchanged with the officer for the money. At that meeting, the officer asked Soto if he could buy 2 or 3 more ounces of cocaine from him at a later time. Soto responded that it would be no problem.
On February 11, 1993, Soto again met with the informant and the undercover police officer in the same parking lot to sell 2 ounces of cocaine for $2,600. Upon meeting, Soto left the area and went into a nearby restaurant. He returned minutes later with 51 grams of cocaine, which he exchanged for the money. Once again, the officer asked Soto at this meeting if he could buy a larger amount later, and Soto again replied that it was no problem.
On February 18, 1993, Soto agreed to meet the informant and undercover police officer at a bar where they waited for the drugs to arrive. At that time, the officer went into the bar to meet Soto and asked to buy an even larger amount of cocaine from Soto in the near future at a reduced price. Soto replied that he knew someone who was bringing cocaine from Mexico which would sell for $1,000 an ounce. When Soto was informed by a woman that the drugs had arrived, he asked the officer to leave and wait in his car. Soto then went out to the car and gave the officer 27 grams of cocaine in exchange for $1,300.
After the February 18 sale, Soto testified that the informant and the undercover police officer called him at least three times a week to arrange a larger sale of cocaine. On March 11, 1993, the officer met Soto and asked to buy 8 ounces of cocaine. The officer agreed to buy 10 ounces for $1,150 per *302 ounce and they arranged a time to meet later in the day. When the officer arrived at a shopping center to meet with Soto, he was wired with a body microphone and had several officers in the area monitoring him. Soto arrived and gave the officer 279 grams of cocaine in exchange for $11,500. After the exchange was completed, Soto was arrested by the backup officers.
Soto was charged with one count of sale of cocaine in the first degree and the state agreed not to charge him with three additional counts if he would testify against two other accomplices. However, Soto declined the offer and the state amended their complaint by adding the three additional counts for sale of cocaine in the first degree. At trial, Soto asserted the defense of entrapment, but was nevertheless found guilty by the jury of four counts of sale of cocaine in the first degree in violation of Minn.Stat. §§ 152.01, subd. 15(a) (1992), 152.021, subd. 1(1) and 3(a) (1992), and 609.05 (1996).
At sentencing, the state requested a double durational departure, while Soto moved for a downward durational departure. The trial judge rejected both requests and sentenced Soto to the presumptive guidelines sentence for each count, using the Hernandez method to calculate his criminal history score. Consequently, Soto was sentenced to 98 months for Count I, based on a level VIII offense and a criminal history score of 1.5 points.[1] The trial judge then assigned two additional criminal history points for Counts II, III, and IV, resulting in concurrent and presumptive sentences of 122 months, 146 months, and 161 months respectively.[2]
Soto appealed the jury's convictions as well as the sentences imposed. The court of appeals remanded the case for an evidentiary hearing on possible prejudice resulting from the presence of the alternate juror during deliberations. However, the court of appeals did not address the issue of sentencing. On remand, the trial court held an evidentiary hearing and found that no prejudice resulted. In this second appeal, Soto again challenged his sentence and the court of appeals affirmed the sentence.[3]
Soto argues that the trial court's use of the Hernandez method to calculate his criminal history score was inappropriate because his multiple convictions involve a single behavioral incident under Minn.Stat. § 609.035.[4] The primary purpose of section 609.035 is to protect a defendant convicted of multiple offenses from unfair exaggeration of the criminality of the conduct and to ensure that punishment is commensurate with culpability. State v. Hartfield, 459 N.W.2d 668, 670 (Minn.1990) (citation omitted); State v. Eaton, 292 N.W.2d 260, 266 (Minn.1980) (citation omitted). Consequently, the Hernandez method cannot be used to increase the criminal history score of a subsequent sentence unless the convictions arose from a different course of conduct under section 609.035. Hartfield, 459 N.W.2d at 670; State v. Banks, 331 N.W.2d 491, 493 (Minn. 1983).
*303 Before we address the arguments in this case, a brief discussion of our decision in Hernandez is necessary. Prior to State v. Hernandez, 311 N.W.2d 478 (Minn.1981), the Minnesota Sentencing Guidelines allowed prior felony convictions to be used in calculating a defendant's criminal history score only if the sentence had been stayed or imposed before the date of sentencing for the current offense. Minnesota Sentencing Guidelines II.B.1 and cmt. II.B.101 (1980).
In Hernandez, this court was confronted with a situation in which the defendant was sentenced on one day for three separate convictions that were not part of a single behavioral incident. 311 N.W.2d at 479. We affirmed the trial court's decision to count the first two convictions of attempted burglary and theft in calculating the criminal history score and sentence for the third conviction for escape. Id. at 481. We held that the addition of two points to the defendant's criminal history score before sentencing him for the third conviction was proper, although the first two sentences were not imposed before the date of sentencing for the current offense. Id. at 479-81.
This court concluded in Hernandez that it was proper for the trial court to count the first two convictions in calculating the defendant's sentence for the third conviction because (1) the three convictions were for separate and distinct offenses that did not involve the same victims, and (2) there was no indication that the trial court was trying to manipulate the Guidelines to achieve a substantive result which the Guidelines did not intend. Id. at 481. This court noted that, in the interests of judicial economy, the trial court was merely trying to do what the Guidelines allowed to be done in three or more days.[5]Id.
Soto challenges the use of the Hernandez method to calculate his sentence on several grounds. First, Soto argues that the controlled substance statute under which he was convicted implicitly states that sales of controlled substances within 90 days are presumed to be part of a single course of conduct.[6] However, such an interpretation would lead to the implausible consequence that a person who makes multiple drug sales within 90 days could only be convicted for one count under Minn.Stat. § 152.021, subd. 1. Rather, a more plausible interpretation of Minn.Stat. § 152.021, subd. 1 is that the 90-day period establishes a time frame within which the prosecution may aggregate sales less than 10 grams.
Next, Soto argues that because the controlled substance statutes under which he was convicted allegedly presume that the offender is engaged in the ongoing act of selling drugs, this presumption must apply for the purposes of section 609.035. Although the controlled substance statutes may very well punish offenders for their status as a particular kind of dealer,[7] those statutes do *304 not presume that the offender is involved in the ongoing business of selling drugs. The legislature has the prerogative to create degrees of punishment for drug crimes based on the quantity of drugs involved. State v. Clausen, 493 N.W.2d 113, 118 (Minn.1992). The mere fact that the legislature assigns those degrees of punishment consistent with the quantities that would be sold by various levels of dealers does not mean that the statutes presume that an offender is engaged in multiple drug sales.
Finally, Soto argues that based on the facts of his case, the drug sales for which he was convicted were all part of a single behavioral act such that section 609.035 prohibits the application of the Hernandez method in determining his sentence. Under section 609.035, the factors to be considered in determining whether multiple offenses constitute a single behavioral act are time, place, and whether the offenses were motivated by a desire to obtain a single criminal objective. Hartfield, 459 N.W.2d at 670 (citing State v. Norregaard, 384 N.W.2d 449 (Minn.1986)); State v. Hawkins, 511 N.W.2d 9, 13 (Minn. 1994). The determination of whether multiple offenses are part of a single behavioral act under section 609.035 is not a mechanical test, but involves an examination of all the facts and circumstances. Banks, 331 N.W.2d at 493.
A balancing of the above factors and the facts and circumstances of this case weighs in favor of finding that Soto's multiple drug sales constituted separate and distinct offenses under section 609.035. Each of the four sales took place on a different day and at a different place, with the exception that two of the sales occurred in the same parking lot. The separate sales were not motivated by a desire to obtain a single criminal objective. While Soto and other defendants convicted of drug sales may be motivated by the single criminal objective of selling drugs to relieve financial hardship, this court has held that the criminal plan of obtaining as much money as possible is too broad an objective to constitute a single criminal goal within the meaning of section 609.035. See Eaton, 292 N.W.2d at 266-67 (finding that two offenses of theft of a check committed three days apart were separate incidents for the purposes of section 609.035). Consequently, we affirm the determination of the court of appeals that the Hernandez method was appropriately used to determine Soto's sentence.
Soto also argues that this court should prohibit application of the Hernandez method in calculating his sentence because the use of that method would permit police officers and prosecutors to manipulate investigative or charging procedures so as to achieve a specific sentence. For instance, Soto argues that police officers could manipulate the amount of drugs or the number of sales involved, while prosecutors could separate the drug sales into multiple charges in order to ensure that a higher sentence would be imposed. Soto further argues that permitting police officers and prosecutors to have such discretion creates the potential for racially biased decision-making and perpetuates racial disparities in the prosecution of drug crimes. While application of the Hernandez method for convictions resulting from undercover drug operations may very well result in such consequences, we have repeatedly recognized that arguments concerning disparities in sentencing are more appropriately addressed to the Sentencing Guidelines Commission. State v. Pittel, 518 N.W.2d 606, 608 (Minn.1994); State v. Litzinger, 394 N.W.2d 803, 806 (Minn.1986); State v. Moore, 340 N.W.2d 671, 673 (Minn. 1983).
Aside from challenging the use of the Hernandez method in calculating his sentence, Soto urges this court to adopt the doctrines of sentencing entrapment and sentencing manipulation to support a downward departure from his presumptive sentence. Soto argues that both doctrines are necessary because application of the Hernandez method in the sentencing of multiple sales of controlled substances to undercover police officers allows those officers to manipulate *305 the Sentencing Guidelines by orchestrating the amount of drugs and the number of sales.
Sentencing entrapment occurs when "outrageous official conduct * * * overcomes the will of an individual predisposed only to dealing in small quantities, for the purpose of increasing the amount of drugs * * * and the resulting sentence of the entrapped defendant." United States v. Barth, 990 F.2d 422, 424 (8th Cir.1993) (quoting United States v. Rogers, 982 F.2d 1241, 1245 (8th Cir.1993). The Eighth Circuit has recognized that the doctrine of sentencing entrapment may be relied upon to depart from the Federal Sentencing Guidelines. United States v. Stavig, 80 F.3d 1241, 1245 (8th Cir.1996). The doctrine of sentencing manipulation is a more recent development and was first distinguished from sentencing entrapment in United States v. Shephard, 4 F.3d 647, 649 (8th Cir.1993), cert denied, 510 U.S. 1203, 114 S.Ct. 1322, 127 L.Ed.2d 671 (1994).[8] Sentencing manipulation is outrageous government conduct aimed only at increasing a person's sentence. Whereas sentencing entrapment focuses on the predisposition of the defendant, the related concept of sentencing manipulation is concerned with the conduct and motives of government officials. Id.
We are concerned with the disparities which result between similarly situated defendants because of varying law enforcement investigative methods or because of differing charging practices. However, we decline to adopt either doctrine in the absence of egregious police conduct which goes beyond legitimate investigative purposes. Even if we were to adopt either doctrine, the trial record of Soto's case does not support a downward departure based on either doctrine. Under the doctrine of sentencing entrapment, Soto would bear the burden of showing that he was predisposed only to sell smaller amounts of cocaine and that he had neither the intent nor the resources for selling the larger amount he was entrapped into selling. See Stavig, 80 F.3d at 1246. Although the record shows that Soto was asked to sell an increased amount of cocaine in his last sale to the undercover police officer, the record lacks any evidence that Soto was not predisposed to sell the larger amount. Soto argues that the state failed to produce evidence that he had ever been involved in the sale of cocaine prior to the sales at issue. However, it is the defendant who bears the burden of establishing sentencing entrapment, and not the state. Id. at 1245.
The record in Soto's case similarly lacks support for a finding of sentencing manipulation. Although recognizing the doctrine of sentencing manipulation, the Eighth Circuit has held that it is reasonable for the police to engage in a chain of transactions with a drug dealer in order to establish that person's guilt or to trace the dealer's supplier. Shephard, 4 F.3d at 649 (citations omitted). Because Soto would bear the burden of establishing the presence of sentencing manipulation, his claim must fail because of the absence of any evidence showing that the drug sales were obtained for the sole purpose of increasing his sentence, rather than to establish his guilt or to trace his supplier.
We therefore affirm the court of appeals and hold that it was proper for the trial court to use the Hernandez method for the purposes of calculating Soto's sentence. We further decline to adopt the doctrines of sentencing entrapment and sentencing manipulation in the absence of egregious police conduct which goes beyond legitimate investigative purposes.
Affirmed.
BLATZ, J., took no part in the consideration or decision of this case.
NOTES
[1] Soto was on probation for fifth-degree possession of marijuana, which is a Level I offense. He thus received one criminal history point for his custody status, and ½ point for the Level I conviction.
[2] For Count II, Soto was given two more criminal history points for his first level VIII conviction so that he had a score of 3.5 for the purposes of calculating his sentence for the second offense. Thus, he was sentenced to 122 months for Count II, based on a level VIII offense and a criminal history score of 3.5. For Count III, Soto received two more criminal history points for his second level VIII offense. He was sentenced to 146 months, based on a level VIII offense and a criminal history score of 5.5. Finally, for Count IV, he again received two additional points to his criminal history score to reflect his third level VIII offense. Soto was sentenced to 161 months for Count IV, based on a level VIII offense and a criminal history score of 7.5.
[3] Soto also appealed the trial court's order requiring him to pay restitution to the St. Paul Police Department and the court of appeals reversed the trial court. This issue was not raised on appeal to this court.
[4] Minnesota Statutes section 609.035, subdivision 1 provides that "* * * if a person's conduct constitutes more than one offense under the laws of this state, the person may be punished for only one of the offenses and a conviction or acquittal of any one of them is a bar to prosecution for any other of them." Minn.Stat. § 609.035, subd. 1 (Supp.1997).
[5] The sentencing guidelines were subsequently amended to reflect this court's decision in Hernandez. Section II.B.1 now provides that an offender will receive a criminal history point for each felony conviction which was sentenced "before the current sentencing," Minnesota Sentencing Guidelines II.B. 1 (1997), rather than the pre-Hernandez language which included convictions "before the date of sentencing for the current offense" in calculating an offender's criminal history score. Minnesota Sentencing Guidelines cmt. II.B.101 (1980).
[6] Soto was convicted of four counts for violating Minn.Stat. § 152.021, subd. 1(1), which provides that a person is guilty of controlled substance crime in the first degree if "on one or more occasions within a 90-day period the person unlawfully sells one or more mixtures of a total weight of ten grams or more containing cocaine." Minn.Stat. § 152.021, subd. 1(1) (Supp. 1997).
[7] Soto's contention that the controlled substance statutes punish offenders for their status as a particular kind of dealer is somewhat supported by the legislative history of those statutes. Prior to 1989, controlled substance statutes did not differentiate levels of offenses based on the quantity of drugs involved. See Minn.Stat. § 152.09 (1988). In 1989, the legislature restructured the controlled substance statutes so that weight-based classifications applied to all drug offenses. See Minn.Stat. § 152.021-25 (1990). Consequently, offenders selling greater quantities were classified under a more severe level than those selling lesser amounts.
Furthermore, the testimony of a witness during legislative hearings suggests that the weight-based classifications were consistent with the amount that various levels of dealers would possess. Hearing on S.F. 3-H.F. 59 before the House Subcomm. on Criminal Justice, 76th Legis. Sess. (Minn. Feb. 24, 1989) (statement of James Kamin, Asst. Hennepin County Attorney). Thus, the weight-based cutoff for third-degree sales was consistent with the amount that a street dealer would sell, whereas the weight-based cutoff for first-degree sales was consistent with what a wholesale dealer would sell. Id.
[8] Prior to Shephard, sentencing manipulation was typically regarded as a form of sentencing entrapment. See United States v. Calva, 979 F.2d 119, 122-23 (8th Cir.1992).
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232 B.R. 57 (1999)
In the Matter of Martin KOPEL and Martin Kopel, Dvm, P.C., Debtors.
Martin Kopel and Martin Kopel, DVM, P.C., Plaintiffs,
v.
Pasquale Campanile a/k/a Pat Campanile, Pasquale Campanile P.C. and Overbaugh Real Estate Corp. Defendants.
Bankruptcy Nos. 197-15804-575, 197-15805-575, Adversary No. 198-1006-575.
United States Bankruptcy Court, E.D. New York.
March 1, 1999.
*58 *59 Ackerman Law Firm, LLC by Neil H. Ackerman, Marianne J. Gallipoli, Westbury, NY, for Plaintiffs.
Bruce H. Roswick, New York City, for Defendants.
OPINION ON CROSS MOTIONS FOR SUMMARY JUDGMENT
LAURA TAYLOR SWAIN, Bankruptcy Judge.
Before the Court are cross motions for summary judgment by plaintiffs Martin Kopel ("Kopel") and Martin Kopel, DVM, P.C. ("Kopel P.C.") (collectively, the "Plaintiffs" or "Debtors") and defendants Pasquale Campanile ("Campanile"), Pasquale Campanile P.C. ("Campanile P.C.") and Overbaugh Real Estate Corporation ("Overbaugh") (collectively, the "Defendants" or "Campanile Entities"). The principal dispute between the parties concerns prerequisites to the assumption of a non-residential real property lease between Overbaugh and Kopel, dated August 23, 1988 (the "Lease"). Defendants' cross-motion on their counterclaim (which incorporates by reference their complaint in Overbaugh Real Estate Corp. v. Martin Kopel (Adv.Proc. No. 198-1039-575)) seeks a declaration that the Lease can be assumed only if Kopel's defaults under a promissory note executed contemporaneously by Kopel and payable to Campanile P.C., dated August 23, 1988 (the "Note"), and a consulting agreement between Kopel and Campanile, also dated August 23, 1988 (the "Consulting Agreement"), are cured, because a cross-default provision in the Lease deems defaults under the Note and the Consulting Agreement to be defaults under the Lease. Payments under the Note and the Consulting Agreement are currently in substantial default. The Court previously granted Plaintiffs an extension of time in which to assume or reject the Lease pursuant to section 365(d)(4) of the Bankruptcy Code (11 *60 U.S.C. § 365(d)(4)) pending a resolution of this adversary proceeding.
Plaintiffs seek a declaration that the cross-default provision is unenforceable. Plaintiffs also seek summary judgment avoiding an allegedly unperfected security interest, which was created by an asset acquisition agreement, dated August 23, 1988, and executed by Campanile P.C., Overbaugh, Campanile and Kopel (the "AAA") and a pledge agreement between Kopel and Campanile P.C. dated August 23, 1998 (the "Pledge Agreement"), in certain assets.[1] All of the foregoing agreements were entered into in connection with Kopel's purchase of a veterinary practice from the Campanile Entities.
Debtors filed their respective bankruptcy cases on May 22, 1997. Kopel P.C. has been making monthly rent payments pursuant to the Lease. Neither Debtor has been making payments under the Note or the Consulting Agreement (collectively, the "Non-Lease Agreements"). The arrears under the Note and the Consulting Agreement, calculated through May 1998, amounted to $63,000 and $57,000 respectively, and the combined arrears under these agreements are now approximately $175,000. The arrears under the Lease include a contractually deferred payment from May 1996.
Overbaugh, the landlord, is a real estate corporation created and wholly owned by Campanile. Campanile formed Overbaugh to acquire the premises located at 1909 Flatbush Avenue, Brooklyn, New York (the "Building") in 1981, and the Building remains Overbaugh's sole asset. Campanile maintained his veterinary practice in the Building, a veterinary hospital built in the 1950's, from the time Overbaugh acquired the Building until Campanile sold the practice to Kopel. Kopel leased the Building from Overbaugh in connection with his purchase of the practice. Debtors have been the exclusive occupants of the Building, pursuant to the Lease, since that time.
The Court has jurisdiction of this proceeding pursuant to 28 U.S.C. §§ 157 and 1334 and the Order of reference, dated August 28, 1986, of the United States District Court for the Eastern District of New York. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(A), (K), and (O).
BACKGROUND[2]
Kopel, a veterinarian, is the sole shareholder of Kopel P.C. d/b/a Gateway Veterinary Arts (the "Gateway Practice"). Campanile, a veterinarian and the sole shareholder of Campanile P.C. and Overbaugh, is Kopel's former employer and the former proprietor of the Gateway Practice. After Kopel had been in Campanile's employ for approximately eight years, Campanile decided to sell the Gateway Practice. In light of a working relationship that had developed during this time, Campanile offered the Gateway Practice to Kopel instead of seeking a third party *61 purchaser. Due to Kopel's financial circumstances, Campanile provided seller-financing for the transaction.
The transaction is described in the Preliminary Statement to the AAA as follows:
[Kopel] is employed by [Campanile P.C.] and desires to purchase the assets of the Gateway Practice. [Kopel] thereafter desires to continue the practice and wishes to enter into certain agreements with Pasquale Campanile in connection therewith. [Kopel] desires to lease the building in which the business operates from Overbaugh. Overbaugh desires to lease the Gateway Building to [Kopel].
In order effectuate the transaction, the parties executed the following documents, all of which are dated August 23, 1988: the AAA, the Lease, the Note, the Consulting Agreement and the Pledge Agreement.
Following defaults by Kopel, a number of the terms of the Lease, the Note and the Consulting Agreement were amended as of January 1, 1994. These amendments resulted in substantial savings to Kopel and included the waiver or deferral of certain obligations in the event that Kopel made timely payments. The parties executed a second Lease Amendment on October 25, 1995.
At the closing of the original transaction, Kopel tendered $75,000 for the assets of the veterinary practice. The remaining $350,000 of the $425,000 purchase price was represented by the Note. The Note initially provided for amortization over 15 years at 12% interest per annum. The 1994 amendment permitted Kopel to defer six payments, interest free, for over 10 years. In addition, the amendment permitted the Note payments due in January and February of each year to be deferred, without interest, until March 1, 2004, provided that Kopel timely made payments during the preceding year and that the Lease and Consulting Agreement were not in default.
The Consulting Agreement contemplates Campanile's provision of consulting services, imposes a restriction on Campanile's ability to compete with Kopel, and provides for an annual salary. The 1994 amendment reduced the annual salary from $40,000 to $38,000 and added a cross-default provision, the invocation of which would relieve Campanile of his agreement not to compete and would, moreover, bar Kopel's practice of veterinary medicine within a five-mile radius of the Gateway Practice.
The Lease, as amended in 1994, expires on December 31, 2005. Monthly rent for the remainder of its term is $9,800. The Lease includes a prospective rent abatement for the annual January and February fixed rent payments provided that all charges under the Lease are timely paid in the preceding year.
The Campanile Entities argue that the cross-default provision in the Lease is enforceable and thus mandates the cure of any default under the Non-Lease Agreements in connection with the assumption of the Lease. They also contend that the Lease and the Non-Lease Agreements document a single, unified transaction such that Debtors cannot retain their rights under the Lease without performing their obligations under the Non-Lease Agreements.
The Campanile Entities rely on the documentary evidence submitted by Debtors and have proffered an affidavit by Campanile. According to Campanile, he intended there to be "but one totally integrated complete transaction in which each document . . . was dependent on and interrelated with all of the others." The documentary evidence is consistent with this stated intention. In addition to the Preliminary Statement in the AAA, numerous cross-references among the documents support the Campanile Entities' contention that the agreements together document a single transaction. Section 1.01 of the AAA, an outline of the transaction, provides for Campanile P.C. to sell the assets of the Gateway Practice to Kopel, for Kopel simultaneously to lease the *62 Building from Overbaugh and for the parties' entry into the other agreements provided for in the AAA. The Lease, the Note, the Pledge Agreement and the Consulting Agreement are annexed as exhibits A, E, F and G, respectively, to the AAA, and the execution of each of those agreements was expressly made a condition precedent to the closing under the AAA. AAA §§ 4.03, 5. Prior to the 1994 restructuring, the Lease and the Note were coterminous: the Lease had a 15 year term and the Note a 15 year repayment period. The AAA further provided that Kopel would practice veterinary medicine for at least 15 years. AAA § 3.03. However, prior to the 1994 amendments, the term of the Consulting Agreement was 10 years (the 1994 amendment extended its term for several months, through December 31, 1998).
Campanile, according to his affidavit, feared the possibility of Kopel's default under these agreements. Thus, he insisted on one essential condition. If Kopel were to default under any one agreement, Campanile would be able to recapture and recover the practice as a whole. Campanile believed he could only recover the real value of the Gateway Practice in the event of a default if he could quickly step in and operate the business. Kopel's acceptance of this condition was, Campanile asserts, the principal inducement for Campanile to go forward with the transaction. Campanile's uncontroverted affidavit asserts that Kopel understood and agreed to the entire arrangement.
Section 18.01 of the Lease sets forth the events of default. Pursuant to that section, a default under the Lease arises if, inter alia:
a default shall occur and continue beyond any applicable grace period under any Note or any other agreement between Pasquale Campanile P.C. and the Tenant [Kopel] or Pasquale Campanile related to the Consulting Agreement or the sale of the veterinary practice conducted within the Premises and/or the Note delivered in connection therewith[.]
Lease § 18.01(D). Each of the Note, the Pledge Agreement and the Consulting Agreement contains a similar provision.[3] In section 3.04 of the AAA, Kopel granted Campanile P.C. a security interest in all of the assets of the Gateway Practice, entitling Campanile P.C. to recover the assets of the Gateway Practice if Kopel breached any obligation contained in the Note, the Lease or the Consulting Agreement. Section 3.04 of the AAA further provides that "[a]ny such default shall also constitute a default under the Lease." The Pledge Agreement provides that the assets of the Gateway Practice secure Kopel's performance under the Lease and the Non-Lease Agreements.
DISCUSSION
Summary judgment shall be granted in favor of a moving party where the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c) (made applicable to bankruptcy proceedings by Fed. R. Bankr.P. 7056). Summary judgment is inappropriate where there is sufficient evidence in the record to permit a reasonable fact finder to find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); L.B. Foster Co. v. America Piles, Inc., 138 F.3d 81, 87 (2d Cir.1998). A court faced with a summary judgment motion "must construe the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor." Kerzer v. Kingly Manufacturing, 156 F.3d 396, 400 (2d Cir.1998) (citing Liberty Lobby, 477 U.S. at 255, 106 S.Ct. 2505 (1986)). Conclusory allegations, conjecture and speculation will not create a genuine issue of fact. Kerzer, 156 F.3d at 400. Summary judgment *63 may be granted even where state of mind is at issue. See Liberty Lobby, 477 U.S. at 256-57, 106 S.Ct. 2505. The Court may consider the whole record, not just the evidence highlighted by the parties. Turco v. Hoechst Celanese Corp., 101 F.3d 1090, 1093 (5th Cir.1996).
The Court notes that Debtors have submitted no admissible evidence, other than the documents themselves, in support of their motion or in opposition to Campanile Entities' cross-motion. Rather, Debtors have proffered only arguments of counsel and a Local Bankruptcy Rule 7056-1 statement of purportedly undisputed facts without any evidentiary support, other than the transaction documents. The factual record before the Court is thus limited to the Campanile affidavit, the transaction documents themselves, and such admissions as may be contained in the pleadings.
Debtors, in a supplemental memorandum of law, have argued that additional extrinsic evidence is necessary to ascertain the parties' intent. Yet, they have neither offered any evidence nor sought a continuance to enable them to obtain further discovery. See Fed.R.Civ.P. 56(f). Kopel himself possesses the necessary knowledge of his intent and the parties' dealings. Like Campanile, he could have submitted an affidavit in support of his motion (and in opposition to Campanile's cross-motion) without formal discovery.
For the following reasons, the Court concludes that there is no genuine issue as to any material fact and that the Lease and the Non-Lease Agreements were entered into as part of a single, integrated transaction, such that the defaults under the Non-Lease Agreements must be cured as a condition to assuming the Lease. See 11 U.S.C. § 365(b). The Court also holds that Defendants' security interest in the assets held by Kopel P.C. is unperfected and is therefore avoided for the benefit of the estate.
1. Prerequisites to Assumption of the Lease
A debtor in possession may assume or reject executory contracts and unexpired leases. See 11 U.S.C. §§ 365, 1107. Here, Debtors will likely seek to assume the Lease while modifying their obligations under the Note and the Consulting Agreement. Before a debtor may assume any contract, it must, with limited exceptions, cure any default arising thereunder or provide adequate assurance of the prompt cure of such default. See 11 U.S.C. § 365(b). A default under one of the Non-Lease Agreements will therefore preclude assumption of the Lease, unless such default is cured, to the extent that the Bankruptcy Code permits enforcement of the cross-default provision.
Determining whether a particular cross-default provision is enforceable requires the balancing of two competing bankruptcy policies. See In re Garrett Road Supermarket, Inc., 1988 WL 98777 (Bankr.E.D.Pa.1988). Generally, section 365(a) permits debtors to assume beneficial executory contracts and reject burdensome ones in order to facilitate reorganization. See Orion Pictures Corp. v. Showtime Networks, Inc. (In re Orion Pictures Corp.), 4 F.3d 1095, 1098 (2d Cir. 1993); Phar-Mor, Inc. v. Strouss Building Associates, 204 B.R. 948, 951 (N.D.Ohio 1997). The issue to be examined is whether enforcement of a cross-default provision, requiring the satisfaction of obligations under nominally separate contracts, would so contravene the policy of providing debtors an unrestricted right to assume and assign valuable contracts that such enforcement must be refused. See Garrett Road, 1988 WL 98777.
It is axiomatic that an executory contract generally must be assumed cum onere. See National Labor Relations Board v. Bildisco and Bildisco, 465 U.S. 513, 531, 104 S.Ct. 1188, 79 L.Ed.2d 482 (1984). A debtor cannot simply retain the favorable and excise the burdensome provisions *64 of an agreement. See In re Village Rathskeller, Inc., 147 B.R. 665 (Bankr. S.D.N.Y.1992). Only certain contractual provisions, such as those expressly rendered unenforceable by the Bankruptcy Code, see, e.g., 11 U.S.C. § 365(e)(1), or those that are designed to thwart bankruptcy policies, are vulnerable. See Village Rathskeller, 147 B.R. at 671-72. In limited circumstances, however, a court may exercise equitable discretion to refuse to enforce a provision where "there is no substantial economic detriment to the [non-debtor counterparty] shown and where enforcement would preclude the bankruptcy estate from realizing the intrinsic value of its assets." Id. at 672 (citing In re Joshua Slocum Ltd., 922 F.2d 1081, 1092 (3d Cir.1990)).
Section 365(f) generally permits a trustee or debtor in possession to assign a lease notwithstanding a provision in the agreement or of non-bankruptcy law that would prohibit, restrict or condition the assignment. 11 U.S.C. § 365(f). The only statutory exceptions to the relief from anti-assignment clauses are set forth in section 365(c). Cross-default provisions are not an enumerated exception. Several courts have held that cross-default provisions, such as section 18.01(D) of the Lease, impermissibly infringe upon the debtor's right to assume and assign leases. These courts have refused to enforce such provisions. See, e.g., EBG Midtown South Corp. v. McLaren/Hart Environmental Engineering Corp. (In re Sanshoe Worldwide Corp.), 139 B.R. 585, 597 (S.D.N.Y. 1992) ("Contractual limitations on the ability to assign unexpired leases other than those specified in § 365(c) are prohibited under § 365(f)."), aff'd, 993 F.2d 300 (2d Cir.1993).
Although, by its terms, section 365(f) applies to invalidate provisions restricting assignment, rather than assumption, of leases, the section is relevant to the assumption inquiry because section 365(f)(2)(A) requires assumption as a predicate to assignment of a contract. Several courts have concluded that section 365(f) therefore prohibits the enforcement of a cross-default provision even where the debtor seeks only to assume, rather than to assume and assign, a contract. See In re Madison's Partner Group, Inc., 67 B.R. 633, 635 (Bankr.D.Minn.1986) (alternate holding) (defaults under cross-defaulted agreement to which the lessor is not a party should not be subject to cure upon assumption of a lease except where (1) the lessor furnished special consideration in connection with the provision; or (2) the lessor's lease bargain would be prejudiced by non-performance); In re Wheeling-Pittsburgh Steel Corporation, 54 B.R. 772, 777-79 (Bankr.W.D.Pa.1985) (where enforcement of the cross-default provision would conflict with the debtor's ability to assume the contract, the provision will not be enforced), aff'd, 67 B.R. 620 (W.D.Pa. 1986); In re Sambo's Restaurants, Inc., 24 B.R. 755, 757 (Bankr.C.D.Cal.1982) (cross-default provisions represent an impermissible restriction on the debtor's ability to assume and assign contracts). This result is consistent with the policy of protecting a debtor's right to assume beneficial contracts only.
Although cross-default provisions are inherently suspect, the Court does not read Sambo's and Wheeling-Pittsburgh Steel to counsel their per se invalidation. Before enforcing such a provision, however, a court should carefully scrutinize the facts and circumstances surrounding the particular transaction to determine whether enforcement of the provision would contravene an overriding federal bankruptcy policy and thus impermissibly hamper the debtor's reorganization. See Garrett Road, 1988 WL 98777; Madison's Partner Group, 67 B.R. at 635 (noting limited situations in which cross-defaults should be enforced); Bistrian v. Easthampton Sand & Gravel Co., Inc. (In re Easthampton Sand & Gravel Co., Inc.), 25 B.R. 193 (Bankr.E.D.N.Y.1982).
On facts analogous to those of the instant case, the bankruptcy court in Easthampton *65 Sand & Gravel rejected the debtor's contention that a note and a lease containing cross-default provisions could be assumed independently of each other. In that case, the debtor had leased a facility and purchased the business operated in it, giving the seller a note representing a substantial portion of the purchase price. The lease contained a cross-default provision rendering a default under the note a default under the lease. The court, while noting that it had equitable power to modify the lease's cross-default provision, refused to permit the debtor "to relieve itself of conditions which are clearly vested by the contracting parties as an essential part of their bargain and which do not contravene overriding federal policy." Easthampton Sand & Gravel, 25 B.R. at 198. To do so, the court continued, would have denied the creditor the benefit of its bargain and resulted in a windfall for the debtor. Id.
The district court in In re T & H Diner, Inc., 108 B.R. 448 (D.N.J.1989), reached a similar conclusion based on different reasoning. In T & H Diner, the debtor executed a series of promissory notes representing the purchase price of the business. The debtor's restaurant operated in premises leased from the former owner. The T & H Diner court found that the lease and a series of notes issued pursuant to a purchase agreement formed one indivisible agreement constituting a single contract for purposes of state law. Thus, the debtor's default under the notes precluded the debtor's assumption of the lease.[4]Id. at 453-54.
Courts have refused to enforce cross-default provisions in situations where the cross-defaulted agreements are not interrelated. For example, in Wheeling-Pittsburgh Steel, the non-debtor party moved for relief from the automatic stay so as to permit it to cancel four insurance policies. However, there had been no actual default under any of the four policies at issue. The court concluded that the four policies did not form a nonseverable insurance package with a policy that was in default, and refused to enforce a cross-default provision linking those four policies with the policy that was in default. See Wheeling-Pittsburgh Steel, 54 B.R. at 780-81. Similarly, the district court in Sanshoe, prior to declaring the cross-default provision unenforceable, determined that leases of different floors in a commercial building constituted separate agreements that were not to be construed as a single contract under the factual circumstances of that case. See Sanshoe, 139 B.R. at 596.
An overriding principle can be gleaned from these and similar cases: Federal bankruptcy policy is offended where the non-debtor party seeks enforcement of a cross-default provision in an effort to extract priority payments under an unrelated agreement. A creditor cannot use the protections afforded it by section 365(b) (which requires curing of defaults *66 and adequate assurances of future payments as a precondition to assumption of an executory contract or unexpired lease) in order to maximize its returns by treating unrelated unsecured debt as a de facto priority obligation. Thus, where the non-debtor party would have been willing, absent the existence of the cross-defaulted agreement, to enter into a contract that the debtor wishes to assume, the cross-default provision should not be enforced. However, enforcement of a cross-default provision should not be refused where to do so would thwart the non-debtor party's bargain.
The Court will now examine the relationship of the Lease to the Non-Lease Agreements.
A. The Lease and the Note
Debtors argue that the cross-default provision of the Lease should not be enforced because the Lease, viewed in isolation, does not indicate that it is part of an integrated transaction and the Lease is supported by independent consideration the "demise of the [Building] and the rents, covenants and conditions contained [therein.]" Indeed, the only references, other than in the cross-default provision, to the larger transaction in the Lease itself are (i) a use restriction, which provides that "[t]he Building may be used and occupied for the practice of veterinary medicine and any related activities only"; and (ii) a provision that Overbaugh may not withhold unreasonably its consent to an assignment or sublet if the assignee or sublessee assumes the obligations under the Lease, the Note and the Consulting Agreement. Lease §§ 4.01, 27.03(d). Debtors also argue that, had Campanile intended one transaction, the 1994 restructuring would have been effectuated with one omnibus amendment similar to the agreement in Progressive Restaurant Systems, Inc. v. Wendy's International, Inc. (In re Progressive Restaurant Systems, Inc.), 1997 WL 251508 (W.D.N.Y.1997).
The Lease is not the only relevant document to be considered. While the references to the overall transaction in the Lease may be limited, there are abundant references to the Lease and the other features of the Gateway Practice purchase in the other transaction documents, including the AAA (to which the Lease itself is an exhibit and one of several documents required to be executed as a condition to closing).
Campanile asserts, in his affidavit, that the "Lease and the leasing of the veterinary hospital to the Debtor was but one part of the single overall transaction providing for the sale of the practice to the Debtor." The sale of a practice as a going concern in the same location clearly necessitates a link between the asset (or stock) sale and a lease (or real estate sale). Indeed, the documentary evidence leads to the inescapable conclusion that the Note and Lease are essential elements of a single transaction. The Note, according to the affidavit, is another "essential part of the bargain for the sale to the Debtor." Campanile asserts in his uncontroverted affidavit that Kopel understood and accepted the unified nature of the transaction.
The Preliminary Statement and section 1.01 of the AAA describe the transaction as one in which Campanile would sell the practice and his wholly owned corporation would lease the Building. Both the Note, representing the bulk of the purchase price, and the Lease were annexed as exhibits to the AAA, and the execution of both agreements was a condition precedent to closing under the AAA.[5] Furthermore, the Lease and the Note were initially *67 coterminous (15 years), and the AAA included a provision that Kopel would continue to operate the Gateway Practice for at least 15 years.[6] Finally, the Lease itself restricts the use of the Building to the operation of a veterinary practice.
The cross-default provision in the Lease must, in light of the documentary evidence and the Campanile affidavit, be regarded as a necessary term, the absence of which would have halted the sale. Had the cross-default provision been absent from the Lease, Campanile's one essential condition to the sale that he be entitled to step in quickly and operate the business in the event of any default would have been thwarted. Campanile's right to repossess the assets pursuant to the Pledge Agreement would have been of limited value without the corresponding entitlement to operate from the Building.
The fact that legally separate entities are parties to the various contracts does not of itself preclude enforcement of the cross-default provision.[7]See Madison's Partner Group, 67 B.R. at 635. While enforcement of a cross-default provision in a lease generally should not inure to the benefit of a third party, Overbaugh is not attempting to use section 365(b) to extract priority payments for unrelated obligations. Instead, the cross-defaults are being asserted to protect the very essence of the bargain made with Debtors by the landlord and its principal. Overbaugh entered into the Lease to facilitate a larger transaction, not simply to collect rent. Kopel has not even argued that he could have entered into the Lease without also entering into the Non-Lease Agreements. Where documents are contemporaneously executed as necessary elements of the same transaction, such that there would have been no transaction without each of the other agreements, the fact that nominally distinct parties executed the agreements will not preclude enforcement of a cross-default provision in favor of a party whose economic interests are identical to those of the entity that is party to the document containing the cross-default provision.[8]
To be sure, enforcing the cross-default provision and requiring the cure of any defaults under the Note will hamper Debtors' reorganization. Debtors, instead of modifying the Campanile Entities' unsecured claim, will be forced to cure the significant arrears under the Note upon assumption of the Lease and to continue making payments under the Note if they wish to remain in the Building. Under the circumstances of this case, the Court can "discern no federal policy which requires severance of a lease condition solely because *68 it makes a debtor's reorganization more feasible." Easthampton Sand & Gravel, 25 B.R. at 199.[9] Here, no federal bankruptcy policy is offended by enforcing the cross-default provision linking the Note and the Lease. Accordingly, Debtors must cure, or provide adequate assurances of the prompt cure of, the arrears under the Note in connection with the assumption of the Lease.
B. The Lease and the Consulting Agreement
Debtors contend that the Consulting Agreement should not be considered part of an integrated transaction including the Lease because the Consulting Agreement is supported by independent consideration (future consulting services) and because, prior to the 1994 Amendment, it made no reference to the Lease. The Campanile Entities assert that the Consulting Agreement is part of the integrated transaction. The connection between the Consulting Agreement and the Lease is not as obvious as the interrelation of the Note and the Lease. Whereas the Note and the Lease are clearly necessary elements of the sale of the Gateway Practice, the Consulting Agreement could be construed as a contract for future employment services and thus not as an essential part of the transaction. Whether to enforce the Lease provision that renders a Consulting Agreement breach a default under the Lease thus turns on whether the parties would have entered into the Lease absent the Consulting Agreement.
Both of the parties' interpretations of the contracts, absent extrinsic evidence, are reasonable. The inquiry, then, is analogous to the interpretation of an ambiguous contract. The fact that a contract is ambiguous does not, however, always create a triable issue of fact. See Mellon Bank, N.A. v. United Bank Corp. of New York, 31 F.3d 113, 116 (2d Cir. 1994) (for ambiguity in a contract to preclude summary judgment, "there must also exist relevant extrinsic evidence of the parties' actual intent"). Significantly, the Campanile Entities have offered relevant extrinsic evidence in support of their position. Debtors, however, have not.
The only relevant extrinsic evidence in the record is Campanile's uncontroverted affidavit. The documentary evidence is, overall, consistent with the parties' understanding, as described in the uncontroverted *69 Campanile affidavit, that there was one unified transaction.[10] Not only was entry into the Consulting Agreement a condition precedent to the execution of the AAA, but the non-competition provision expressly referred to in the AAA is found in the Consulting Agreement.
A careful review of the Consulting Agreement in the context of the Gateway Practice purchase transaction and in light of the Campanile Affidavit leads to the conclusion that the principal purposes of the agreement were to provide Campanile, the principal of Overbaugh and Campanile P.C., with ongoing cash income from the practice in addition to payments from the Note and Lease, to reinforce the legal predicate for the non-competition agreement protecting Kopel's interest in the business, and to provide Campanile with a continuing connection with the business during a substantial portion of the payment period under the Lease and the Note. Campanile, according to his affidavit, depends on the ongoing income generated by the Gateway Practice transaction to support his family. The Consulting Agreement is but one of several agreements that together provide for the income stream; the terms of the Consulting Agreement strongly support this conclusion. Unlike an ordinary employment agreement providing for a fixed salary, no particular services or times of work are specified. Campanile is merely required to be "available" at mutually acceptable times to for consultation. Consulting Agreement § 2. The agreement provides that Kopel's only remedy for Campanile's breach of the non-competition provision of the Consulting Agreement is to reduce (not even eliminate) the payments owed under that agreement. Moreover, the amendment to the Consulting Agreement, while acknowledging that Campanile had moved to Arizona and reducing the annual consulting payments from $40,000 to $38,000, increased Campanile's aggregate income payable under the Consulting Agreement (by approximately $2,600) because of the extension of its term by approximately four months.
As evidenced by the transaction documents and the uncontroverted extrinsic evidence, the Consulting Agreement was a fundamental part of this transaction; enforcement of the cross-default provision between the Lease and Consulting Agreement thus would not offend federal bankruptcy policy. Debtors must therefore cure (or provide adequate assurances of the prompt cure of) the default under the Consulting Agreement as a condition to the assumption of the Lease.
II. Perfection and Avoidance of Security Interest
Debtors' complaint seeks to avoid Campanile P.C.'s purported security interest in Kopel P.C.'s assets. In support of their motion for summary judgment, Debtors have submitted lien searches demonstrating Campanile P.C.'s failure to file U.C.C. financing statements with either the Secretary of State in Albany, New York or with the Kings County Clerk's Office. The Campanile Entities concede that they can find no evidence that financing statements were filed. They argue that, if the liens are avoided, the other secured creditors should not move up in priority.
The Pledge Agreement and section 3.04 of the AAA grant Campanile P.C. a security interest in most of the assets held by Kopel P.C.[11] Kopel P.C. seeks to avoid this security interest. Pursuant to sections 544 and 1107 of the Bankruptcy Code, a debtor *70 in possession may avoid a transfer of property that could have been avoided by a hypothetical creditor obtaining a judicial lien at the commencement of the case. 11 U.S.C. § 544(a)(1). The creation of a security interest is a transfer of property. See 11 U.S.C. § 101(54).
Article 9 of the New York U.C.C. governs the creation of security interests in personal property. A security interest is perfected when it attaches and all other applicable steps for perfection are taken. Attachment occurs when the debtor has signed a security agreement covering the collateral, value has been given and the debtor has rights in the collateral. N.Y.U.C.C. § 9-203. A financing statement is necessary for the perfection of security interests unless the U.C.C. provides otherwise. See N.Y.U.C.C. § 9-302(1). The Campanile Entities concede that no financing statement has been filed. No exceptions to the requirement that a financing statement be filed are applicable here. Accordingly, the security interest has attached but is unperfected.
An unperfected security interest in assets is subordinate to a judicial lien on the same assets. N.Y.U.C.C. § 9-301(1)(b). Therefore, under section 544(a)(1), Campanile P.C.'s unperfected security interest is subordinated to Kopel P.C.'s hypothetical judicial lien, and Kopel P.C. may avoid Campanile P.C.'s security interest.
Any lien avoided by a debtor in possession is preserved for the benefit of the estate. 11 U.S.C. § 551. When a debtor in possession preserves the lien for the benefit of the estate, the debtor in possession steps into the shoes of the avoided lienor, see Carvell v. Bank One, Lafayette, N.A. (In re Carvell), 222 B.R. 178, 180 (1st Cir. BAP 1998), and acquires the same priority that such avoided lienor's lien had with respect to other creditors' liens. See In re DeLancey, 94 B.R. 311, 313 (Bankr.S.D.N.Y.1988).
Here, Kopel P.C. has acquired an unperfected security interest. An unperfected security interest is subordinate to a properly perfected security interest. See N.Y.U.C.C. 9-301(1); 9-312. Several parties, including at least one insider, allegedly hold perfected liens on property of the estate. Assuming their liens are entitled to priority over Campanile P.C.'s unperfected security interest, the preservation of Campanile P.C.'s lien for the benefit of the estate does not give the estate a first priority lien on Kopel P.C.'s assets.[12]
CONCLUSION
The Lease, the Note and the Consulting Agreement are all in default. The Court holds that the defaults under the Note and Consulting Agreement must be cured in connection with the assumption of the Lease. The Court further holds that Defendants' security interest in the assets held by Kopel P.C. is unperfected and is avoided for the benefit of the estate. With respect to Plaintiffs' First Claim for Relief, relating to the perfection and avoidance of the security interest, Plaintiffs' motion for summary judgment is GRANTED. With respect to Plaintiffs' Second Cause of Action and Defendants' Counterclaim, relating to the enforceability of the cross-default provision and the prerequisites for the assumption of the Lease, Defendants' cross-motion is GRANTED and Plaintiffs' motion is DENIED.
Defendants shall settle an order consistent with the foregoing opinion.
NOTES
[1] Kopel, as an individual, is the sole debtor party to the agreements. Kopel P.C. has, however, scheduled the assets covered by Campanile P.C.'s security interest on Schedule B (personal property) and the Lease on Schedule G (executory contracts and unexpired leases). The parties have proffered no evidence of an assignment or novation, and section 7.14 of the AAA provides that an assignment of Kopel's rights in the agreements does not absolve Kopel from liability thereunder. Because the situation is unclear and the parties have not distinguished between Kopel and Kopel P.C. in their papers on these issues, the Court will at times refer for convenience in this opinion to "Debtors" assumption of the Lease. Use of the plural does not signify any determination by this Court as to the relationship of the individual debtor parties to any of the transactions discussed herein. Similarly, any reference to the assets as belonging to Kopel P.C. implies no determination that there has been a valid transfer. The Court assumes for purposes of this opinion that Campanile P.C. has retained rather than assigned its security interest.
[2] Both parties rely on the transaction documents submitted by Debtors. The Court has also taken into account an affidavit submitted by Campanile and admissions in pleadings.
[3] The cross-default provision of the Consulting Agreement was added in 1994.
[4] Where several documents are construed as one contract, the debtor must assume or reject them together. See Pieco, Inc. v. Atlantic Computer Systems, Inc. (In re Atlantic Computer Systems, Inc.), 173 B.R. 844, 849 (S.D.N.Y.1994); see also Progressive Restaurant Systems, Inc. v. Wendy's International, Inc. (In re Progressive Restaurant Systems, Inc.), 1997 WL 251508 (W.D.N.Y.1997). The five documents here at issue all have New York choice of law provisions, and their construction is governed by New York law. See Butner v. United States, 440 U.S. 48, 54-55, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979); In re S.E. Nichols Inc., 120 B.R. 745, 748 (Bankr. S.D.N.Y.1990). Because the Lease includes an express cross-default provision that this Court holds is enforceable, the Court need not reach the issue of whether the transaction documents ought to be construed as one contract under New York law. See Rudman v. Cowles Communications, Inc., 30 N.Y.2d 1, 13, 330 N.Y.S.2d 33, 42, 280 N.E.2d 867 (1972); BWA Corp. v. Alltrans Express U.S.A. Inc., 112 A.D.2d 850, 852, 493 N.Y.S.2d 1,3 (1st Dep't 1985); Williams v. Mobil Oil Corp., 83 A.D.2d 434, 439-40, 445 N.Y.S.2d 172, 175 (2d Dep't 1981). See also Commander Oil Corp. v. Advance Food Service Equipment, 991 F.2d 49, 53 (2d Cir.1993); Carvel Corp. v. Diversified Management Group, Inc., 930 F.2d 228, 233 (2d Cir.1991).
[5] Although the dependence of the AAA on the execution of these other documents does not require the conclusion that one agreement would not have been executed without the other, cf. Byrd v. Gardinier, Inc. (In re Gardinier, Inc.), 831 F.2d 974, 976 (11th Cir.1987), the conditions do evidence the intent of the parties that the Gateway Practice be sold as a going concern.
[6] Cf. Moore v. Pollock (In re Pollock), 139 B.R. 938, 941 n. 6 (9th Cir. BAP 1992) (separateness of the agreements evidenced by the fact that there were not coterminous); In re Karfakis, 162 B.R. 719, 725 (Bankr.E.D.Pa.1993) (fact that contracts were coterminous considered in determining that the parties intended the two contracts to constitute a single contractual agreement).
[7] Kopel is a party to each of the documents here at issue. Each of the Campanile Entites is a party to the AAA. Campanile, individually, is the counterparty to the Consulting Agreement. Campanile PC is the counterparty to the Note and Pledge Agreement. Overbaugh is the counterparty to the Lease. Campanile is the sole principal of all of the Campanile Entities and, thus, the economic benefits of all of the agreements ultimately inure to him.
[8] Debtors rely heavily on Garrett Road, 1988 WL 98777, in arguing that the enforcement of the cross-default provision would violate federal bankruptcy policy. In that case, the court found three factors to be dispositive in its holding that enforcement of the cross-default provision would violate bankruptcy policy. First, the court noted that the only connection between the sublease and the purchasing agreement was the cross-default provision. Second, the non-debtor obligees were distinct entities. Finally, the non-debtor had superior bargaining power. Garrett Road is readily distinguishable because, here, the Note and the Lease are essential elements of one transaction. The myriad of cross-references and the extrinsic evidence offered by Campanile permit no other reasonable conclusion. Nor is there any evidence of significant inequality of bargaining power.
[9] Debtors attempt to distinguish Easthampton Sand & Gravel on the ground that, in that case, it appeared that the parties intended the lease to be security for the note. See Easthampton Sand & Gravel, 25 B.R. at 199 n. 6. Here, the Note was intended to be secured by the Pledge Agreement and not the Lease. Thus, they argue, the cross-default provision is unenforceable. See In re Pampoukidis, 104 B.R. 576, 578-79 (Bankr.D.Conn.1989). However, nothing in Easthampton Sand & Gravel leads this Court to conclude that a cross-default provision in a lease should be enforced only if the lease was intended to be security for a note. Indeed, one court has held to the contrary and permitted the assumption of a lease notwithstanding a default under a related note where the bankruptcy court found that the parties intended the lease to function as security for the note. See Moore v. Pollock (In re Pollock), 139 B.R. 938 (9th Cir. BAP 1992). Securing a note with a lease merely entitles the landlord to an additional secured claim for the value of the lease. See 11 U.S.C. § 506(a).
The Court recognizes an anomaly created by the structure of the Gateway Practice purchase transaction. Had the Campanile Entities sold rather than leased the Building and taken a mortgage for the entire sale price, Debtors would have been able to modify their obligations, bifurcating Defendants' claim into secured and unsecured portions, had they been able to propose a confirmable plan to that effect. See id. Because the lease is an executory contract that must be current to be assumed, rather than a mortgage that could be modified in a confirmed plan, Defendants are entitled to a cure of the Note arrears even if the total of the arrears and balance of the Note exceeds the value of the collateral. The disparity in treatment is not unique to this situation. A debtor cannot modify the terms of the lease, and must cure defaults upon assumption, even where the current market rate for the leased property is below the contract rate. The Bankruptcy Code itself mandates this "preferential" treatment for lessors.
[10] Campanile asserts, in his affidavit, that Kopel understood the documents to constitute an integrated transaction. This fact is uncontroverted. Debtors' failure to adduce evidence creating a genuine issue of fact makes summary judgment in the Campanile Entities' favor appropriate. See Nycal Corp. v. Inoco PLC, 988 F.Supp. 296, 299-300 (S.D.N.Y. 1997), aff'd, 166 F.3d 1201, 1998 WL 870192 (2d Cir.1998) (table).
[11] See supra, n. 1.
[12] Nothing in this opinion constitutes a determination that those senior liens are valid or not avoidable.
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423 Pa. Superior Ct. 378 (1993)
621 A.2d 166
Robin Lynn HACKMAN and John Hackman
v.
MOYER PACKING, t/a Mopac
v.
Michael CURRIE, t/a Currie Cleaning Service, Appellant.
Superior Court of Pennsylvania.
Argued October 28, 1992.
Filed March 8, 1993.
*380 Donna A. Hoch, Media, for appellant.
Barbara C. Karkut, Philadelphia, for Moyer Packing, appellee.
Before WIEAND, OLSZEWSKI and HOFFMAN, JJ.
WIEAND, Judge:
In this appeal, we are asked to review the enforceability of an agreement made by a cleaning service to indemnify its customer against bodily injury claims made by employees of the cleaning service. The trial court held that the agreement was sufficiently specific to require that it be enforced. We agree and affirm.
Robin Hackman, an employee of Currie Cleaning Service (Currie), filed an action against Moyer Packing Company (Moyer) in which she alleged that she had fallen while working for her employer on Moyer's premises. The fall and injuries sustained therein, she alleged, had been caused by Moyer's negligence. Moyer caused Currie to be joined as an additional defendant, alleging that Currie had agreed to indemnify Moyer against Hackman's claim. Both Moyer and Currie thereafter filed motions for summary judgment. The trial court *381 entered summary judgment in favor of Moyer and held that Currie was liable to indemnify Moyer for any damages recovered by Hackman in her action against Moyer. Currie appealed.
Section 481(b) of the Workmen's Compensation Act provides as follows:
§ 481. Exclusiveness of remedy; actions by and against third party; contract indemnifying third party
. . . .
(b) In the event injury or death to an employe is caused by a third party, then such employe, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to receive damages by reason thereof, may bring their action at law against such third party, but the employer, his insurance carrier, their servants and agents, employes, representatives acting on their behalf or at their request shall not be liable to a third party for damages, contribution, or indemnity in any action at law, or otherwise, unless liability for such damages, contributions or indemnity shall be expressly provided for in a written contract entered into by the party alleged to be liable prior to the date of the occurrence which gave rise to the action.
Act of December 5, 1974, P.L. 782, No. 263, § 6, 77 P.S. § 481(b) (emphasis supplied).
In Bester v. Essex Crane Rental Corporation, 422 Pa.Super. 178, 619 A.2d 304 (1993), the Superior Court concluded that an indemnity agreement would not be enforced in employee actions against third parties unless the employer's agreement to indemnify the third party was made to apply specifically to claims by its employees. In the absence of specific language, the Court held, an employer's waiver of the immunity granted to the employer by the Workmen's Compensation Act would not be inferred. The Court said:
[C]ontracting parties must specifically use language which demonstrates that a named employer agrees to indemnify a named third party from liability for acts of that third party's *382 own negligence which result in harm to the employees of the named employer. Absent this level of specificity in the language employed in the contract of indemnification, the Workmen's Compensation Act precludes any liability on the part of the employer.
Id. at 308-09.
Instantly, the indemnification agreement provides in relevant part:
[Currie] . . . agrees to indemnify, save and hold harmless Moyer Packing Company, its subsidiaries, affiliates, their directors, officers, agents, workmen, servants or employees, against any and all claim or claims brought by the agents, workmen, servants or employees of [Currie] for any alleged negligence or condition, caused or created, [in] whole or in part, by Moyer Packing Company.
By this language Currie specifically agreed to indemnify Moyer for liability arising from harm suffered by Currie's employees while working on Moyer's premises, even though Moyer may have been negligent in causing or contributing to the employees' injuries. As such, the requirements for waiver under the Workmen's Compensation Act have been met. The trial court did not err in concluding that the indemnity agreement was enforceable against Currie.
Currie also contends that its agreement to indemnify was not supported by valuable consideration. Currie asserts that it and Moyer had enjoyed a business relationship for at least a year before the indemnity clause was inserted into their existing agreement. Although it is generally true that a modification of a contract must be supported by new consideration, see: Wilcox v. Regester, 417 Pa. 475, 482, 207 A.2d 817, 821 (1965), the rule is inconsequential here. The original contract by which Currie was engaged to perform cleaning services for Moyer was subject to termination by either party upon 60 days notice to the other. Therefore, Moyer's forbearance in terminating the cleaning services of Currie was adequate consideration for the agreement to indemnify. In order to continue its employment of Currie, Moyer could require *383 that Currie agree to indemnify it against third party claims by Currie's employees.
The parties' indemnification agreement does not violate public policy. As all the decisions agree, an agreement to indemnify another against claims based on such other person's own negligence will be enforced so long as the parties' intent clearly appears. See, e.g.: Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., 404 Pa. 53, 57, 171 A.2d 185, 187 (1961); Woodburn v. Consolidation Coal Co., 404 Pa.Super. 359, 364-366, 590 A.2d 1273, 1275-1276 (1991). Here, as we have observed, the indemnity agreement specifically obligated Currie to indemnify Moyer against employee claims even though based on Moyer's own acts of negligence.
The contract was not one of adhesion. The contract was between two commercial entities, and there is nothing that would have prevented Currie's awareness of its terms. See: Egan v. Atlantic Richfield Co., 389 Pa.Super. 290, 296, 566 A.2d 1249, 1252 (1989), allocatur denied, 525 Pa. 634, 578 A.2d 929 (1990). For all these reasons, the trial court properly determined that the indemnification agreement was enforceable.
The contract requires Currie not only to indemnify Moyer but also to undertake the defense of actions filed against Moyer by Currie's employees. Because of this the agreement is broad enough to require Currie to reimburse Moyer for counsel fees and costs incurred in defending Hackman's action.
By other terms of the parties' agreement, Currie was required to purchase insurance coverage to protect against liability claims. This was a provision separate from Currie's agreement to indemnify Moyer. The fact that Moyer accepted a policy providing less coverage than that required by the terms of the parties' agreement did not constitute a waiver of the benefits accruing under Currie's agreement to indemnify. The terms of the indemnification agreement are enforceable and Currie is obligated to indemnify Moyer *384 against the claim being made by Hackman.[1] Therefore, the entry of summary judgment in favor of Moyer was proper.
Order affirmed.
NOTES
[1] Currie has also contended that Moyer improperly filed a supplemental brief after briefing and oral argument in the trial court. The procedure for briefing, however, is left largely to the discretion of the trial court. The trial court has stated in its opinion that Moyer's supplemental brief was received before the conclusion of briefing and argument. We have no basis on which to disagree with the trial court's observation, and no basis for deciding the present appeal differently because of the manner in which briefs were filed in the trial court.
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46 F.3d 1123
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Ernest DAVIS, Petitioner Appellant,v.Sewall SMITH, Warden; Attorney General of The State ofMaryland; John Joseph Curran, Respondents Appellees.
No. 94-6843.
United States Court of Appeals, Fourth Circuit.
Submitted: December 13, 1994Decided: January 12, 1995.
Appeal from the United States District Court for the District of Maryland, at Baltimore. John R. Hargrove, Senior District Judge. (CA-94-334)
Ernest Davis, Appellant Pro Se. John Joseph Curran, Jr., Attorney General, Mary Ann Rapp Ince, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, MD, for Appellees.
D.Md.
AFFIRMED.
Before WIDENER and NIEMEYER, Circuit Judges, and PHILLIPS, Senior Circuit Judge.
PER CURIAM:
1
Appellant appeals from the district court's orders denying relief on his 28 U.S.C. Sec. 2254 (1988) petition. Our review of the record and the district court's orders and opinion accepting the recommendation of the magistrate judge discloses that this appeal is without merit. Accordingly, we affirm on the reasoning of the district court. Davis v. Smith, No. CA-94-334 (D. Md. Mar. 16 and July 11, 1994).* We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the Court and argument would not aid the decisional process.
AFFIRMED
*
We also dismiss without prejudice Appellant's petition for writ of habeas corpus subsequently filed directly in this Court. Under Fed. R.App. P. 22(a), a petition for a writ of habeas corpus must first be filed in the appropriate district court
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http://www.va.gov/vetapp16/Files6/1648551.txt
VIEWERROR
IDOLPROXYVIEW-2147483134
0x80000202
Connection was closed before the whole entity has been read/written
ERROR
07 Feb 17 12:00:24
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849 F.2d 1470
Dutyv.Lynaugh
NO. 87-1726
United States Court of Appeals,Fifth Circuit.
JUN 15, 1988
1
Appeal From: N.D.Tex.
2
REVERSED.
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18-526
Lobacz v. United States
18‐526‐pr
Lobacz v. United States
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the sixth day of March, two thousand nineteen.
PRESENT: BARRINGTON D. PARKER,
DENNY CHIN,
RICHARD J. SULLIVAN,
Circuit Judges.
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
FRANK LOBACZ,
Petitioner‐Appellant,
v. 18‐526‐pr
UNITED STATES OF AMERICA,
Respondent‐Appellee.
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
FOR PETITIONER‐APPELLANT: JOHN F. KALEY, Doar Rieck Kaley &
Mack, New York, New York.
FOR RESPONDENT‐APPELLEE: J. MATTHEW HAGGANS, Assistant
United States Attorney (Jo Ann M.
Navickas, Assistant United States
Attorney, on the brief), for Richard P.
Donoghue, United States Attorney
for the Eastern District of New York,
Brooklyn, New York.
Appeal from the United States District Court for the Eastern District of
New York (Hurley, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the order of the district court is AFFIRMED.
Petitioner‐appellant Frank Lobacz appeals from the district courtʹs
memorandum and order filed January 18, 2018, denying his motion pursuant to
28 U.S.C. § 2255 to vacate, set aside, or correct his sentence. Lobacz argues that his
counselʹs failure to move to sever the healthcare fraud counts from the pension plan
fraud and tax fraud counts constituted a per se violation of his Sixth Amendment right
to effective assistance of counsel. We assume the partiesʹ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
On November 12, 2010, Lobacz was convicted of two counts of healthcare
fraud, one count of filing a false Internal Revenue Service Form 550, and three counts of
income tax evasion. On June 22, 2016, Lobacz timely filed a habeas petition pursuant to
28 U.S.C. § 2255 to vacate, set aside, or correct his 2010 conviction. Relevant to this
appeal, Lobacz claimed that his counsel was per se ineffective for failing to move for a
severance of the healthcare fraud counts under Federal Rule of Criminal
‐ 2 ‐
Procedure 14(a).1 The district court denied Lobaczʹs petition, reasoning that Lobaczʹs
claims did not fit within the two limited situations where per se ineffective assistance of
counsel claims have been recognized. In addition, the district court held that, while the
counts ʺmay not have been properly joined,ʺ Lobaczʹs claim failed the test for ineffective
assistance of counsel under Strickland v. Washington, 466 U.S. 668 (1984), because the
failure to move to sever could have been strategic, the evidence against Lobacz was
ʺoverwhelming on all counts,ʺ and ʺthe jury was appropriately instructed to consider
each count separately.ʺ Def. Appx. at 97‐100.
On February 16, 2018, Lobacz filed a timely notice of appeal. On February
23, 2018, the district court issued a certificate of appealability, pursuant to Rule 11 of the
Rules Governing § 2255, for the following question: ʺ[W]hether [Lobaczʹs] counsel[ʹs]
failure to move for a severance is a per se violation of his Sixth Amendment right to
counsel, i.e., that [Lobacz] need not make a particularized showing of prejudice
pursuant to Strickland v. Washington, 466 U.S. 668 (1984).ʺ Def. Appx. at 109.
DISCUSSION
ʺOn appeal from a district courtʹs denial of habeas relief under 28 U.S.C.
§ 2255, we review factual findings for clear error and conclusions of law de novo.ʺ
Harrington v. United States, 689 F.3d 124, 129 (2d Cir. 2012).
1 Lobacz also argues that his counsel was ineffective because he failed to investigate and
present witnesses and evidence. This issue was not certified for appeal.
‐ 3 ‐
The Sixth Amendment grants criminal defendants the right to the effective
assistance of counsel. Strickland, 466 U.S. at 686. In general, a defendant claiming
ineffective assistance must show that (1) ʺcounselʹs performance was deficientʺ and (2)
ʺthe deficient performance prejudiced the defense.ʺ Id. at 687. We have, however,
recognized two limited situations constituting per se ineffective assistance where the
defendant need not show particularized prejudice: when counsel is either ʺ(1) not duly
licensed to practice law . . . or (2) implicated in the defendantʹs crimes.ʺ United States v.
Rondon, 204 F.3d 376, 379‐80 (2d Cir. 2000) (per curiam). In recognizing these two per se
situations, we reasoned that the former situation creates a jurisdictional bar to a valid
conviction, while the latter situation creates a serious conflict of interest. Id. at 380‐81.
Here, Lobaczʹs counsel was not per se ineffective for failing to move to
sever the healthcare fraud counts from the pension plan fraud and tax fraud counts
under Rule 14(a). Lobaczʹs claim is clearly not within the limited per se situations that
we have previously recognized: Lobacz claims neither that his counsel was not licensed,
nor that his counsel was implicated in his crimes. Lobacz, therefore, asks us to extend
our per se ineffectiveness rule.
We are, however, ʺreluctant to extend a rule of per se prejudice in any new
direction.ʺ Tippins v. Walker, 77 F.3d 682, 686 (2d Cir. 1996). In fact, beyond the two
limited situations articulated in Rondon, ʺ[i]n every other situation, we have refused to
apply the per se rule.ʺ Rondon, 204 F.3d at 380 (collecting cases). In addition, there is no
‐ 4 ‐
basis for creating a new rule here. The fact that Lobaczʹs counsel failed to move for
severance is not tantamount to having ʺno counsel at all,ʺ and it does not present a
ʺʹconflict of interestʹ that would prevent zealous representation, such that his
representation could be deemed per se deficient.ʺ United States v. Griffiths, 750 F.3d 237,
242 (2d Cir. 2014) (per curiam) (providing rationale for rejecting a new per se rule).
Moreover, under Rule 14(a), severance is not required even if prejudice is
shown. Fed. R. Crim. P. 14(a) (ʺIf the joinder of offenses . . . appears to prejudice a
defendant . . . , the court may . . . sever the defendantsʹ trials, or provide any other relief
that justice requires.ʺ (emphasis added)); see Zafiro v. United States, 506 U.S. 534, 538‐39
(1993) (ʺRule 14 does not require severance even if prejudice is shown.ʺ). And the
misjoinder of claims alone is not prejudicial. See United States v. Lane, 474 U.S. 438, 449
(1986) (ʺ[W]e do not read Rule 8 to mean that prejudice results whenever its
requirements have not been satisfied.ʺ). Prejudice, therefore, cannot be presumed
simply where counsel failed to move for severance under Rule 14(a) because Rule 14(a)
does not require severance, and misjoinder alone is not prejudicial.
Lobacz argues that the per se rule should be extended here because the
ineffectiveness was so ʺblatant and elementalʺ and the prejudice ʺwas so great.ʺ
Appellantʹs Br. at 30. This argument, however, asks us to evaluate Lobaczʹs claim under
Strickland. But, our review is confined to the ʺspecific issue or issuesʺ that the district
court certified for appeal. Rules Governing § 2255 Proceedings, Rule 11; see Armienti v.
‐ 5 ‐
United States, 234 F.3d 820, 824 (2d Cir. 2000) (ʺWe will not address a claim not included
in the certificate of appealability.ʺ). Here, the district court only certified the issue of
per se ineffectiveness ‐‐ i.e., whether a particularized showing of prejudice is required.
To consider the elements of Strickland ‐‐ i.e., whether Lobacz is prejudiced on the facts of
his case ‐‐ would be to consider issues not certified for appeal.
Even assuming we could consider Lobaczʹs claim under Strickland, his
claim would fail because he was not prejudiced by his counselʹs failure to move to sever
the healthcare fraud counts. The district court properly found that ʺthe evidence
against Lobacz was overwhelming on all counts,ʺ Def. Appx. at 97‐99, and therefore
there is no ʺreasonable probability that, but for [his] counselʹs unprofessional errors, the
result of the proceeding would have been different,ʺ Cullen v. Pinholster, 563 U.S. 170,
189 (2011). Accordingly, we hold that the district court properly denied Lobaczʹs per se
ineffectiveness claim.
* * *
We have considered Lobaczʹs remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the order of the district court.
FOR THE COURT:
Catherine OʹHagan Wolfe, Clerk
‐ 6 ‐
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335 F.Supp. 566 (1971)
Len J. DILLON and Fred R. Davis, Plaintiffs,
v.
SCOTTEN, DILLON COMPANY et al., Defendants.
Civ. A. No. 4182.
United States District Court, D. Delaware.
December 16, 1971.
*567 David T. Dana, III, Richards, Layton & Finger, Wilmington, Del., and Andrew N. Grass, Jr. and James P. Conroy, Windels, Merritt & Ingraham, New York City, of counsel, for plaintiffs.
Richard F. Corroon, Charles S. Crompton, Jr. and Michael D. Goldman, Potter, Anderson & Corroon, Wilmington, Del., for defendants.
OPINION
LATCHUM, District Judge.
This case involves the question of who has the rightful possession of two seats on the Board of Directors of Scotten, Dillon Company ("Scotten, Dillon"). Invoking jurisdiction pursuant to 28 U.S.C. § 2201, Section 27 of the Securities Exchange Act of 1934, 15 U.S.C. § 78aa, and the principles of pendent jurisdiction, the plaintiffs, Len J. Dillon ("Dillon") and Fred R. Davis ("Davis"), have filed suit to set aside the election of the individual defendants William M. Prifti ("Prifti") and S. Geyer Bean ("Bean") as directors of Scotten, Dillon. The plaintiffs contend that the elections of Prifti and Bean to the Board by other Board members were unlawful because they were not elected by a majority of the directors "then in office." Plaintiffs also contend that the elections of Prifti and Bean to the Board by the stockholders on March 31, 1971, were illegal because their elections were procured as a result of false and misleading proxy statements. For relief the plaintiffs have requested a declaratory judgment that they are entitled to the office of director of Scotten, Dillon until the next annual meeting of the stockholders and until their successors have been duly elected and qualified.
The case is before the Court on the plaintiffs' motion for summary judgment in their favor on the above issues. There is no genuine dispute of the relevant facts which may be summarized as follows.
Davis was originally elected a director of Scotten, Dillon in 1968, before Scotten, Dillon became a Delaware corporation through a merger with a Michigan corporation of the same name. Pursuant to the By-Laws of Scotten, Dillon and the Agreement of Merger, Davis was to serve as a director until his successor was elected and qualified. He was also to serve for a term of three years, which term was to terminate at the annual meeting held in 1971. (Davis Aff. pars. 5-8Docket Item 12.)
Dillon was originally elected a director of Scotten, Dillon in 1954 and remained a director from that date forward. He was last elected a director in 1968 for a three year term, and pursuant *568 to the terms of the By-Laws and the Agreement of Merger, he was to serve until his successor was elected and qualified. (Davis Aff. pars. 6-8Docket Item 12.)
On September 16, 1970, a meeting of the Board was held in Buffalo, New York. The following were present and acted as Board members: F. Steven Berg ("Berg"), George K. Bissell ("Bissell"), William Lerner ("Lerner"), Ernest Summers ("Summers"), Harold Gray ("Gray") and Dillon. At that time the Board consisted of seven members, a majority of which was four. (Compl. pars. 14, 17Docket Item 1; Ans., pars. 14, 17Docket Item 8). Prifti was nominated and purportedly elected an interim director to fill a newly created directorship.[1] Voting in favor of Prifti's election to the Board were Berg, Lerner, Bissell and Summers. Gray and Dillon voted against him.
On December 9, 1970, another Board meeting was held in Buffalo. Present and participating as Board members at that meeting were the following: Berg, Bissell, Lerner, Summers, Prifti, Dillon and Davis. At the meeting Bean was nominated and purportedly elected an interim director to fill a second newly created directorship. Prior to Bean's election, the Board, if Prifti's election was valid consisted of eight members, five of which constituted a majority. Voting in favor of Bean's election were Berg, Bissell, Lerner, Summers and Prifti. Dillon and Davis voted against him.
On February 5, 1971, a Board meeting was held in New York City. In attendance and participating at that meeting were Berg, Lerner, Summers, Bean, Gray and Dillon. The Board voted to call the 1971 Annual Meeting and passed the following resolutions:
"FURTHER RESOLVED, that the Chief Executive Officer, Executive Vice President and Secretary of the Company, and either of them be and hereby are authorized and empowered to cause to be prepared and sent to stockholders an Annual Report, a Notice of Annual Meeting, a Proxy Statement, and a Proxy, . . .;"
* * * * * *
"FURTHER RESOLVED, that the Board of Directors hereby appoints S. Geyer Bean and William M. Prifti, directors, as the management slate for election to the Board of Directors of the Company at said Annual Meeting . . .;" (Crompton Aff., Ex. D, pps. 15-16Docket Item 15).
Berg, Lerner, Summers and Bean voted in favor of the above resolutions. Gray and Dillon voted against them.
On or about March 10, 1971, the proxy soliciting material was sent to the stockholders of Scotten, Dillon. It purported to represent management and stated that Bean and Prifti had been nominated as candidates for the Board by the Board of Directors on February 5, 1971. It also stated that both Bean and Prifti had been elected interim directors, subsequent to the 1970 Annual Meeting. At the 1971 Stockholders' Meeting that was held on March 31, 1971, Bean and Prifti were elected as directors to the seats formerly held by Davis and Dillon, leaving two seats vacant. (Compl. par. 34 Docket Item 1.)
The heart of plaintiffs' argument centers on the fact that on May 6, 1971, this Court held in the case of Dillon v. Berg, 326 F.Supp. 1214 (D.Del.1971), that Summers had never been legally elected a director of Scotten, Dillon and was not entitled to hold the office of director. Therefore, plaintiffs contend that Summers could not have been considered a director "then in office" under § 223 of the Delaware Corporation Law, 8 Del.C. § 223, during any of the dates mentioned above. Plaintiffs further contend, that since Summers was illegally in office and *569 could not be counted as an officer "then in office" on the dates in question, there was never a valid election of either Prifti or Bean[2] as interim directors nor was there a valid designation of Prifti and Bean as nominees for election as directors at the 1971 Annual Meeting or a valid authorization for the preparation and distribution of proxy material for that Annual Meeting.
Thus, the success of the plaintiffs' contention depends upon whether Summers' votes at the above meetings were valid. If not the plaintiffs must prevail.
Section 223 of the Delaware Corporation Law, 8 Del.C. § 223, states:
"(a) Unless otherwise provided in the certificate of incorporation or bylaws, vacancies and newly created directorship resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, . . ."
The Certificate of Incorporation of Scotten, Dillon has no provision on the subject. However, Article IV, Section 3 of the By-Laws of the Company states, in part:
"If the office any director becomes vacant by reason of death, resignation, disqualification, increase in the number of directors or otherwise, the remaining directors may, at any regular or special meeting of the Board of Directors at which a quorum is present, elect a successor . . ."
And Article IV, Section 5 of the By-Laws provides in part:
"A majority of the members of the Board of Directors shall constitute a quorum for the transaction of business, . . ."
"Neither section specifies the voting strength necessary to elect a director to fill a vacancy or newly created directorship." Dillon v. Berg, supra, 326 F. Supp. at 1226. Therefore, as this Court previously held in Dillon v. Berg, § 223 of the Delaware Corporation Law, 8 Del. C. § 223, governs this situation. Thus, at the election of Prifti as an interim director on September 16, 1970, a majority of the Directors "then in office" was four. Dillon v. Berg, supra, at 1226; See In Re Chelsea Exchange Corporation, 18 Del.Ch. 287, 159 A. 432 (1932).
The defendants contend that, while Summer's election to the Board may have been illegal, he could properly act as a de facto director.[3] However, despite the defendants' claim that Summers' votes were properly counted on the dates in question since he was at least a de facto director "then in office," this Court holds that the de facto directors' doctrine does not apply when there is a direct challenge to a disputed office. That doctrine may not be used to perpetuate illegal control.
The general rule affecting de facto directors is as follows:
"The acts and contracts of a de facto officer, acting within the sphere of his office, are just as valid and binding upon the corporation as if he were an officer de jure, so far as third persons are concerned." 2 Fletcher, Cyclopedia of Corporations § 383.
In this case the challenge does not involve third parties. It concerns two sets of officers claiming title to the same directorships. The doctrine of de facto directors does not apply in cases not involving third parties. See 2 Fletcher, Cyclopedia of Corporations § 383; Accord, Mortgage Land Investment Co. v. McMains, 172 Minn. 110, 215 N.W. 192, 196 (1927); In Re George Ringler & Co., 204 N.Y. 30, 97 N.E. 593, 598 (1912); Shellenberger v. Patterson, 168 Pa. 30, 31 A. 943, 945 (1895). The law of Delaware is in accord with this *570 principle. In Young v. Janas, 34 Del.Ch. 287, 103 A.2d 299 (1954), the Delaware Court of Chancery, in finding an election of a director by one class of stockholders invalid, stated:
"It is clear that Walsh was invalidly elected and since we are not concerned with problems of the rights of third persons dealing with the corporation, it seems . . . that his status can be successfully attacked in this type of proceeding at least by a Class A stockholder. See In re Chelsea Exchange Corp., 18 Del.Ch. 287, 159 A. 432; 1 Cook on Corps., 9th Ed., pp. 2937-2938. Even if the actions of a director so elected might be accepted for certain purposes in dealing with the internal affairs of a corporation, as illustrated by Drob v. National Memorial Park, Inc., 28 Del.Ch. 254, 41 A.2d 589, nevertheless, I do not believe that the very status of a director so elected is insulated from direct attack by some extension of the de facto theory. A contrary result would seriously impair the vitality of charter and by-law provisions as well as the theory of corporate democracy." 103 A.2d at 301.
Additionally, the case of In re Chelsea Exchange Corporation, 18 Del.Ch. 287, 159 A. 432 (1932), is virtually identical to the present factual situation and supports the plaintiffs' position. In that case the corporation had a nine man board of directors, a majority of which was a quorum. Two board members resigned and on October 15, 1931, two of the seven remaining directors purported to elect two others to fill the vacancies. The Court ruled that the two new directors had not been lawfully elected to fill the vacancies. Thus, the remaining original seven directors constituted the de jure board. At a later meeting held on November 19, 1931, six of the original board, plus the two illegally elected directors, purported to accept another resignation and filled the vacancy by a five to three vote. The Court treated the two illegally elected directors as if they had never attended the November 19th meeting. It was not a meeting of eight of the full nine member board. It was a meeting of six of the seven de jure board members. The Court discounted the votes cast by the two illegally elected directors who had voted with the majority. Thus, the vote for filling the additional vacancy was three to three, one vote shy of a majority of a quorum. The election was declared null and void, and the newly elected director was not entitled to sit on the board.
Having found that Summers was illegally in office in Dillon v. Berg, supra, 326 F.Supp. at 1225-1226, the Court holds that the de facto directors doctrine cannot be extended to the facts of this case. The votes cast by Summers at the meetings in question must be discounted. Therefore, the following results occur: (1) Prifti was not lawfully elected an interim director of Scotten, Dillon on September 16, 1970. Upon subtracting Summers' vote, the result of that election was a three to two vote in favor of Prifti, one vote short of a majority of the directors "then in office";[4] (2) Bean was not lawfully elected an interim director at the Board Meeting of December 9, 1970. After subtracting the votes cast by Summers and Prifti at that election,[5] the vote for Bean was three to two, again one vote short of the necessary majority of the directors "then in office"; and (3) the resolutions adopted on February 5, 1971, purporting to nominate Prifti and Bean as Board nominees for the seats that Dillon and Davis then held and authorizing the Executive Committee to prepare and distribute proxy solicitation for the 1971 *571 Annual Meeting were invalid.[6] When the votes of Summers and Bean are subtracted, it is clear that the resulting vote on the resolutions was two to two; thus, less than a majority of the directors present voted in favor of the actions.
Having made the above findings, the Court further concludes that the proxy material sent to the shareholders on March 10, 1971, was materially false and misleading in several respects thereby nullifying and voiding the election of Prifti and Bean to the Board on March 31, 1971.
The plaintiffs have alleged that Section 14(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(a),[7] was violated. It is contended that, although the proxies mailed by Scotten, Dillon purported to conform to the requirements of Regulation 14A, the proxies contained statements which at the time and under the circumstances in which they were made were false and misleading which respect to material facts and which omitted material facts necessary to make the statements therein not false or misleading.
The plaintiffs contend, and the Court holds, that the proxy material was false and misleading in the following respects: (1) It purported to have been furnished "in connection with the soliciting of proxies by [m]anagement. . . ."; (2) It stated that "[s]ubsequent to the 1970 annual meeting the Board of Directors . . . appointed S. Geyer Bean and William M. Prifti interim directors. . . ."; (3) It stated that "the Board of Directors [had] nominated the following as candidates for directors. . . .: S. Geyer Bean, William M. Prifti"; and (4) It stated that "each of such persons [was] presently a director of the Company, . . ."
Since the votes of Summers, Prifti and Bean can not be counted because they were illegally elected to office, the statements made in the proxy materials were not true. The necessary vote of directors essential to give truth to the above statements had not been obtained in any instance.
"In order to find that Rule 14a-9, 17 CFR § 240.14a-9, has been violated by false or misleading statements or omissions, the statements or omissions must be material."[8] Dillon v. Berg, supra, 326 F.Supp. at 1233.
Applying the standard of materiality set forth by the United States Supreme Court in Mills v. Electric Auto-Lite Co., 396 U.S. 375, 384, 90 S.Ct. 616, 24 L.Ed. 2d 593 (1970) and applied by this Court in Gould v. American Hawaiian Steamship Co., 319 F.Supp. 795, 802 (D.Del. 1970) and Dillon v. Berg, supra, 326 F. Supp. at 1233, that a statement or omission is material if it "was of such a character that it might have been considered important by a reasonable shareholder who was in the process of deciding how to vote" or had a "significant propensity to affect the voting process," the Court finds that false statements made by Scotten, Dillon in its proxy materials *572 were materially misleading. See Dillon v. Berg, supra, at 1233-1235.
No question exists that this Court has the power to grant all necessary relief to redress violations of Section 14(a) of the Securities Exchange Act of 1934. J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed. 2d 423 (1964). In view of the violations of Section 14(a) referred to above, the proxies used at the March 31, 1971 Annual Shareholders Meeting of Scotten, Dillon must be declared void and the election of Prifti and Bean as directors declared null and void. Since the elections of Prifti and Bean to succeed Dillon and Davis are null and void, successors to Dillon and Davis have never been lawfully elected. Therefore, Dillon and Davis are still entitled to the office of director of Scotten, Dillon under the Company's By-Laws, Article IV, Section 2, which reads:
"Each Director so elected shall hold office for the term for which he was elected and until his successor is elected and qualified." (Compl. Exh. B Docket Item 1).
In this case no successor to either Dillon or Davis has yet been lawfully elected and qualified.[9]
Defendants contend that they are not bound by the decision in Dillon v. Berg, supra, since they were not parties to that case. The Court finds no merit to this contention. The prior judgment in Dillon v. Berg operates res judicata as to Scotten, Dillon Company, a party in that case. Prifti and Bean were de facto directors of the Company, positions creating sufficient "identity of interest" with the Corporation to make the decision in Dillon v. Berg binding upon them. See 1B Moore's Federal Practice ¶ 0.411[10] (2d ed. 1965).
Accordingly, the Court will enter a judgment declaring (1) that Prifti and Bean were never validly elected as directors of Scotten, Dillon by the stockholders at the 1971 Annual Meeting, and (2) that Dillon and Davis are entitled to serve as directors of Scotten, Dillon until their successors are duly elected and qualified or until the positions which they occupy are otherwise legally terminated.
NOTES
[1] Art. IV, Section 1 of the By-Laws provided that the corporation should be managed by not less than six or more than fifteen directors. The Board was empowered to increase the number of directors within these limits and to elect interim directors to serve until the next annual meeting. At the September 16, 1970 Board meeting, the Board increased the number of directors from seven to nine.
[2] If Summers' vote for Prifti was invalid and Prifti was therefore not legally on the Board, Prifti's vote for Bean could not be counted for the purpose of obtaining majority support for Bean.
[3] The defendants rely on Dillon v. Berg, supra, 326 F.Supp. at 1226 (fn. 15) which states: "Summers' status as a de facto director or the validity of corporate acts done by him are not before this Court in the present suit."
[4] On the date of the September 16, 1970 Board meeting in Buffalo, the Board of Directors consisted of seven men, a majority of which was four. (Compl. pars. 14, 17Docket Item 1; Ans. Pars. 14, 17Docket Item 8).
[5] Since by discounting Summers' vote Prifti was not legally in office, his vote, likewise, cannot be counted in determining whether Bean received a majority of the votes of the directors "then in office."
[6] Since the Certificate of Incorporation and the By-Laws of Scotten, Dillon are silent on the subject, Section 141(b) of the Delaware Corporation Law, 8 Del. C. § 141(b), governs as to the vote of the directors necessary to transact business. That section provides in part:
"The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless the certificate of incorporation or the by-laws shall require a vote of a greater number."
[7] See Rule 14a-9, 17 CFR § 240.14a-9.
[8] Rule 14a-9 reads in part: "(a) No solicitation subject to this regulation shall be made by means of any proxy statement, form of proxy, notice of meeting or other communication, written or oral, containing any statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading." 17 CFR § 240.14 a-9.
[9] See Vogtman v. Merchants' Mortgage & Credit Corp., 20 Del.Ch. 364, 178 A. 99, 104 (1935); In Re Mississippi Valley Utilities Corp., 2 F.Supp. 995, 997 (D.Del.1933).
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196 P.3d 719 (2008)
ISLA VERDE INTERNATIONAL HOLDINGS, LTD., a foreign corporation, and Connaught International Holdings, Ltd., a foreign corporation, Respondent,
v.
CITY OF CAMAS, Washington, a municipal corporation of the State of Washington, Appellant.
No. 36066-7-II.
Court of Appeals of Washington, Division 2.
November 12, 2008.
*720 William Dale Kamerrer, Law Lyman Daniel Kamerrer et al., Olympia, WA, for Appellant.
Le Anne Marie Bremer, Joseph Vance, Miller Nash LLP, Vancouver, WA, for Respondent.
PUBLISHED OPINION
HUNT, J.
¶ 1 Defendant City of Camas (the City) appeals the trial court's grant of summary judgment to developer Isla Verde International Holdings, Ltd. and Connaught International Holdings, Ltd. (Isla Verde) on the liability element of its Land Use Petition Act (LUPA)[1] petition for damages under RCW 64.40.020(1). The City argues that (1) Isla Verde failed to exhaust administrative remedies before filing its LUPA petition in superior court; (2) the trial court erred in ruling the City's conductimposition of a 30 percent open-space set-aside condition on Isla Verde's developmentwas an "unlawful act" for purposes of Chapter 64.40 RCW damages; and (3) the trial court erred in granting summary judgment based on its unsupported ruling that the City knew or reasonably should have known that imposition of the 30 percent open-space set-aside condition was unlawful, which were material issues of fact.
¶ 2 Holding that whether the City knew or reasonably should have known its 30 percent open-space set-aside condition was unlawful are issues of material fact, we reverse summary judgment on the liability issue and remand for trial.
*721 FACTS
I. Plat Application
¶ 3 In 1995, Isla Verde submitted a preliminary plat application to the City of Camas to develop its 13.4-acre property into 51 lots. Isla Verde Int'l Holdings, Inc. v. City of Camas, 146 Wash.2d 740, 746, 49 P.3d 867 (2002). After hearing public comments, the Camas Planning Commission recommended that the City Council approve the development with the following conditions: (1) construction of a secondary access road for emergency vehicles; (2) payment of impact fees for parks, recreational facilities, and open-space under Camas Municipal Code (CMC) § 3.88.070; and (3) compliance with CMC § 18.62.020,[2] which required every development within a certain class to "retain a minimum of thirty (30%) percent of the site as open space" ("open-space setaside").[3]Isla Verde Int'l. Holdings, Inc. v. City of Camas, 99 Wash.App. 127, 130-31, 990 P.2d 429 (1999), aff'd, 146 Wash.2d 740, 49 P.3d 867 (2002), quoting CMC § 18.62.020A.
¶ 4 The City Council considered Isla Verde's application and the Planning Commission's recommendations. Isla Verde, 146 Wash.2d at 748, 49 P.3d 867. Isla Verde objected to all of the Planning Commission's recommended conditions, especially the mandatory 30 percent open-space set-aside. Id. at 749, 49 P.3d 867. Attempting to negotiate a lesser set-aside, Isla Verde volunteered to pay the City money in exchange for the City's reducing the percentage of open-space to be set aside as a condition of plat approval.[4]Id. These negotiations apparently did not result in an agreement.
¶ 5 In July 1995, the City Council approved Isla Verde's application on condition that Isla Verde (1) build a secondary access road for emergency vehicles in and out of the subdivision, and (2) set aside 30 percent of the subdivision land as open-space, with no opportunities to for Isla Verde "buy down" the full percentage. Id. at 746-50, 49 P.3d 867.
II. Procedure
A. First Appeal
1. Superior court LUPA review
¶ 6 Seeking LUPA review of the City's allegedly unlawful conditions imposed on its proposed subdivision, Isla Verde filed an action for damages under RCW 64.40.020 in Clark County Superior Court. Id. at 750, 49 P.3d 867. The superior court ruled that the secondary access road condition violated both constitutional substantive due process and chapter 64.40 RCW because this condition (1) was impossible to satisfy, unduly burdensome, arbitrary and capricious; and (2) denied every viable use of the property. Id. The superior court also ruled that the mandatory 30 percent open-space set-aside condition was a "taking" in violation of the state constitution, RCW 82.02.020, and chapter 64.40 RCW, because the City had made no specific finding that Isla Verde development impacts necessitated this condition. Id. Accordingly, the superior court struck both subdivision plat approval conditions as unlawful.
*722 ¶ 7 The City moved for reconsideration. In support, it submitted a 1991 land use study on which it had based the mandatory 30 percent open-space set-aside requirement. This study, however, showed only the benefits of open-space generally; it did not tie the 30 percent open-space set-aside requirement to any specific impact of Isla Verde's development. Isla Verde, 99 Wash.App. at 133, 990 P.2d 429. Refusing to consider the City's additional evidence as "untimely," the superior court denied the motion for reconsideration. Id. at 132-33, 990 P.2d 429.
2. Court of Appeals
¶ 8 The City appealed. We affirmed the superior court's ruling that the mandatory 30 percent open-space set-aside condition on Isla Verde's subdivision was unlawful. We held that the 30 percent open-space set-aside violated the Takings Clause of the Fifth Amendment to the federal Constitution.[5]Isla Verde, 99 Wash.App. at 137-38, 990 P.2d 429.
3. Supreme Court
¶ 9 The Washington Supreme Court granted the City's petition for review. Isla Verde Int'l Holdings, Inc. v. City of Camas, 141 Wash.2d 1011, 10 P.3d 1071 (2000). The City argued that the conditions it had imposed on Isla Verde's development were valid. Isla Verde, 146 Wash.2d at 745, 49 P.3d 867. With respect to the set-aside open-space condition, our Supreme Court disagreed.
¶ 10 The Supreme Court, however, did not address the constitutionality of the condition or the City's ordinance.[6] Instead, the court focused on the condition's illegality under RCW 82.02.020. Emphasizing that the City had failed to show it had made an individualized determination to justify the mandatory 30 percent open-space set-aside condition, the Supreme Court held that the condition was an unlawful "in kind indirect `tax, fee, or charge' on new development" under RCW 82.02.020.[7]Isla Verde, 146 Wash.2d at 759, 49 P.3d 867. The court reasoned that (1) "[a]side from the ordinance requiring a flat 30 percent set aside for every proposed subdivision, there [was] nothing in the record explaining why 30 percent was chosen as the amount of open-space"; and (2) the lack of a correlation between the 30 percent open-space set-aside and impacts of Isla Verde's development rendered the condition unlawful under RCW 82.02.020. Id. at 763, 49 P.3d 867.
¶ 11 Although invalidating the 30 percent open-space set-aside condition, the court upheld the secondary access-road condition, Id. at 769, 49 P.3d 867, and remanded the case for further proceedings. Id. at 771, 49 P.3d 867.
B. Remand to Superior Court; Isla Verde's Claim for Damages
¶ 12 On remand, Isla Verde moved for partial summary judgment against the City on the issue of liability under chapter 64.40 *723 RCW. Isla Verde argued that the City knew or reasonably should have known that Washington law requires a municipality to conduct an individualized analysis before imposing a blanket condition, such as the mandatory 30 percent open-space set-aside at issue here.
¶ 13 The City cross-moved for summary judgment, arguing that Isla Verde could not prevail at trial as a matter of law because Isla Verde had failed (1) to challenge the open-space set-aside as unlawful under RCW 64.40 on appeal; (2) to present evidence that the City knew or reasonably should have known its 30 percent open-space set-aside condition was unlawful; and (3) to present evidence of cognizable damages.
¶ 14 Agreeing, in part, with Isla Verde, the superior court concluded:
[I]t is clear that the [c]ourts have consistently found that the action of the City in imposing the condition of 30 [percent] open-space on this development was not valid. Specifically, applying this condition without a showing of need in this specific application violated RCW 82.02.020.
Clerk's Papers (CP) at 388 (emphasis added). The superior court further noted that once the validity of the City's mandatory set-aside ordinance was challenged,
[T]he City had the option of withdrawing the condition or appealing the Superior Court's decision. The City elected to appeal not only the Superior Court but also that of the Court of Appeals. Clearly, at this juncture, the City should have known that the ordinance as applied was invalid. The wealth of reported case law in existence at this time supports this conclusion. Thus I find that the City's actions in defending the ordinance after the issue was raised, invokes the ramifications of RCW 64.40.
....
I must allow petitioner the opportunity to prove any damages pursuant to the statute.
CP at 389-90.
¶ 15 Finding no genuine issue of material fact about whether the City knew or should have known that its blanket 30 percent open-space set-aside condition was unlawful, the superior court (1) denied the City's motion for summary judgment, (2) granted Isla Verde's motion for summary judgment on the knowledge/liability element of its claim, and (3) set the case for trial at which Isla Verde would prove what damages, if any, the City owed under chapter 64.40 RCW.
C. Interlocutory Appeal
¶ 16 The City petitioned our court for discretionary review, which we granted on the limited issues of whether, as a matter of law, the City acted "unlawfully" and knew or reasonably should have known that its action was unlawful.[8] Thus, there has not yet been a trial on damages.
ANALYSIS
¶ 17 Isla Verde filed a LUPA action against the City for damages under RCW 64.40.020. Isla Verde asserted that the City knew or reasonably should have known that its imposition of a mandatory 30 percent open-space set-aside was "unlawful" within the meaning of RCW 64.40.020(1), thus entitling it to damages, costs, and attorney fees as a matter of law. The trial court agreed and granted summary judgment to Isla Verde on the issue of liability under the statute.
¶ 18 RCW 64.40.020 provides, in part:
(1) Owners of a property interest who have filed an application for a permit have an action for damages to obtain relief from acts of an agency which are arbitrary, capricious, unlawful, or exceed lawful authority, or relief from a failure to act within time limits established by law: PROVIDED, That the action is unlawful or in excess of lawful authority only if the final decision of the agency was made with knowledge of its unlawfulness or that it was in excess of lawful authority, or it *724 should reasonably have been known to have been unlawful or in excess of lawful authority.
(2) The prevailing party in an action brought pursuant to this chapter may be entitled to reasonable costs and attorney's fees.
(3) No cause of action is created for relief from unintentional procedural or ministerial errors of an agency.
(emphasis added).
I. Exhaustion of Administrative Remedies
¶ 19 The City first contends that Isla Verde's failure to file a RCW 64.40 administrative claim, challenging the mandatory 30 percent open-space set-aside condition, precluded its filing a LUPA petition for damages in superior court.[9] Isla Verde counters that it objected to this condition at its first opportunity and in the proper forum.
¶ 20 The record supports Isla Verde. Until the City issued its final order, Isla Verde contested the City's open-space set-aside condition at every stage of the administrative proceedings below: (1) in its negotiations with the City for an agreement allowing Isla Verde to "buy down" the 30 percent set-aside,[10] (2) in proceedings before the Camas Planning Commission, and (3) in proceedings before the City Council. When the City conditioned final plat approval on a 30 percent open-space set-aside, Isla Verde filed a LUPA petition in Clark County Superior Court, challenging the condition as a violation of RCW 82.02.020. Isla Verde, 99 Wash. App. at 132-33, 990 P.2d 429.
¶ 21 The City neither specifically alleges nor demonstrates what additional administrative steps Isla Verde should have taken in order to exhaust further administrative options before filing its LUPA petition in superior court. Moreover, the superior court's written ruling mentions no administrative procedure deficiencies attributable to Isla Verde.
¶ 22 Accordingly, we hold that the City has not shown that Isla Verde failed to exhaust its administrative remedies before filing its LUPA petition in superior court. Therefore, the trial court's summary judgment ruling is properly before us on appeal, and we now address the pertinent substantive issues.
II. "Unlawful Act"
¶ 23 The City next argues that the trial court erred by granting summary judgment to Isla Verde based on ruling the following acts to have been "unlawful" for purposes of RCW 64.40.020:(1) the City's litigation in this case, unlawful under RCW 64.40.020(1);[11] and (2) the City's imposition of the mandatory 30 percent open-space set-aside condition, unlawful under RCW 82.02.020. We address each argument in turn.
A. Litigation
¶ 24 Isla Verde counters that the City mischaracterizes the trial court's ruling on *725 remand: (1) The trial court did not rule that the City's litigation in this case was an "unlawful act" for RCW 64.40 purposes; and (2) instead, the trial court ruled that the unlawful act was the City's imposition of the mandatory 30 percent open-space set-aside condition, which the Supreme Court had previously held unlawful under RCW 82.02.020. The record supports Isla Verde's characterization of the trial court's ruling that the City's unlawful "act" was its automatic imposition of the 30 percent open-space set-aside as a condition of plat approval in violation of RCW 82.02.020.
¶ 25 Accordingly, we do not further address the City's argument that the trial court improperly ruled its "litigation" was an "unlawful act" for purposes of Isla Verde's RCW 64.40.020 action for damages.
B. Mandatory Open-space Set-aside
¶ 26 The City's challenge to the trial court's summary judgment rulingthat imposition of the 30 percent mandatory open-space set-aside was an "unlawful act" for purposes of RCW 64.40.020(1) damagesalso fails. In remanding to the trial court after the first appeal in this case, the Supreme Court held that the City's 30 percent open-space set-aside condition was "unlawful" under RCW 82.02.020. Isla Verde, 146 Wash.2d at 765, 49 P.3d 867. The Supreme Court's holding is determinative of this issue and binding. Therefore, we do not further consider it.
¶ 27 The Supreme Court did not, however, address the issue of whether the City knew or reasonably should have known that this condition was unlawful at the time the City imposed it in 1995. That issue was not before the court.
III. Issues of Material Fact
¶ 28 Thus, the issue we now address is whether the City is liable to Isla Verde for potential damages under RCW 64.40.020(1) as a matter of law on summary judgment, without a trial on the issues of whether the City knew or reasonably should have known that its mandatory 30 percent open-space set-aside condition on Isla Verde's development was an "unlawful act." The City argues that this is a genuine issue of material fact for trial and, therefore, we should reverse the trial court's summary judgment for Isla Verde on the issues of the City's knowledge and resultant liability.[12] We agree.
A. Standard of Review
¶ 29 On review of a summary judgment, we perform the same inquiry as the trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wash.2d 853, 860, 93 P.3d 108 (2004) (citing Kruse v. Hemp, 121 Wash.2d 715, 722, 853 P.2d 1373 (1993)). The standard of review is de novo; summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). When reviewing a summary judgment motion, we view all facts in the light most favorable to the nonmoving party. Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wash.2d 16, 26, 109 P.3d 805 (2005) (citing Atherton Condo. Apartment-Owners Ass'n Bd. of Dirs. v. Blume Dev. Co., 115 Wash.2d 506, 516, 799 P.2d 250 (1990)).
B. Whether City Knew or Reasonably Should Have Known that Its Act Was Unlawful
¶ 30 Based on a city ordinance, the City conditioned Isla Verde's final plat approval on a mandatory 30 percent open-space set-aside without showing a specific relationship between this condition and any potential negative impact of Isla Verde's development that this condition would mitigate. As we have already noted, in 1999, we held this condition to be unlawful; in 2002, the Supreme Court affirmed our result, but on other grounds.[13]
*726 ¶ 31 At issue now is whether in 1995, when the City imposed this condition on Isla Verde's development, the City knew or reasonably should have known that such a condition was an "unlawful act" for purposes of establishing potential liability for damages under RCW 64.40.020(1). Acknowledging that this issue involves related questions of law, we nevertheless hold that it involves significant issues of material fact that require resolution by trial.
¶ 32 Again, the pertinent portion of RCW 82.02.020 provides: "[N]o ... city ... shall impose any tax, fee, or charge, either direct or indirect ... on the development, subdivision... of land." Thus, the plain language of RCW 82.02.020 expressly renders unlawful only monetary exactions such as "taxes, fees, or other charges." In contrast, this statute does not mention or expressly render unlawful non-monetary conditions, such as the on-site open-space set-aside condition at issue here. Although RCW 82.02.020 expressly allows local government to require dedications of land "reasonably necessary as a direct result of the proposed development or plat," the statute does not similarly address whether local government may impose conditions restricting an owner's use of substantial portions of property[14] that do not involve dedication for public use.[15]
1. Supreme Court's 2002 Isla Verde decision
¶ 33 In 2002, in the instant case, our Supreme Court addressed for the first time a development condition that did not require dedication of land to the public, a fee in lieu of such dedication, or a "direct" "tax, fee, or charge" under RCW 82.02.020. Isla Verde, supra. Former CMC § 18.62.020A[16] required new subdivisions to "retain a minimum *727 of thirty (30%) percent of the site as open-space." And this open-space requirement was "in addition to any area required to be dedicated to meet standards for the provision of parks, schools, open-space or other facilities." CMC § 18.62.020B (emphasis added). Nevertheless, the Supreme Court noted, "[T]he Camas ordinance authorizing the set aside condition is quite similar to the ordinance at issue in Trimen,[[17]] which required a dedication or reservation of open-space, or a fee in lieu thereof." Isla Verde, 146 Wash.2d at 758-59, 49 P.3d 867.
¶ 34 Contrary to the dissent's assertion here,[18] the court then held, arguably for the first time, that (1) the City's mandatory 30 percent open-space set-aside condition was "an in kind indirect `tax, fee, or charge' on new development"; and (2) the City's ordinance mandating this condition violated RCW 82.02.020 because the City had failed to conduct any analysis showing that the 30 percent open-space set-aside was "reasonably necessary as a direct result of the proposed subdivision." Isla Verde, 146 Wash.2d at 759, 49 P.3d 867 (emphasis added).
*728 ¶ 35 Since the Supreme Court's Isla Verde decision became final in 2002, it has been beyond dispute that the City's 30 percent open-space set-aside condition violated RCW 82.02.020. Thus, if the City had imposed such a condition after the Supreme Court's 2002 decision, we would likely agree with the dissent, as a matter of law, that the City knew or reasonably should have known that its action was unlawful. Such is not the case here, however, because the City imposed the condition at issue some seven years before the Supreme Court's Isla Verde decision holding, arguably for the first time, that the condition was unlawful under RCW 82.02.020.
2. Case Law before the Supreme Court's 2002 Isla Verde decision
¶ 36 The Supreme Court's Isla Verde footnote 8 to the contrary,[19] the law on the issue before us here was not previously so clear that we can say as a matter of law on summary judgment that the City knew or reasonably should have known that its 30 percent open-space set-aside condition was unlawful for purposes of RCW 64.40.020(1). Instead, before the 2002 Isla Verde decision, it was arguably clear only that monetary payments and actual dedications of land with optional monetary payments in lieu of dedication were unlawful conditions under RCW 82.02.020. In addition to R/L Assocs., Inc., the other cases that the Supreme Court cites in support of its Isla Verde holding involved either dedication of land to the local government or "voluntary" payments of "impact fees" in lieu of on-site dedication of land for open-space, parks, drainage, traffic improvements, or recreational facilities,[20] not restrictive regulation of the owner's use of land for which he retains ownership, like the on-site open-space set-aside condition at issue here. Isla Verde, 146 Wash.2d at 749-50, 49 P.3d 867.[21]
¶ 37 Contrary to the dissent's assertion here, none of the cited cases in Isla Verde arguably involved a local government's required setting aside of open-space on site for which the local government did not seek transfer of title. Similarly, none of those cases arguably involved circumstances such as those at issue here, where the developer and future lot owners retained ownership but, nevertheless, could not develop the set-aside land because the City's plat approval condition required the that this open-space be "maintained in a natural and undisturbed state." Former CMC § 18.62.020C. Despite the Supreme Court's footnote 8, we are aware of no published opinion filed before its 2002 Isla Verde decision expressly holding *729 that a non-dedicated, on-site set-aside of open-space was equivalent to a "tax, fee, or [other] charge," unlawful under RCW 82.02.020. 146 Wash.2d 740, 49 P.3d 867.[22]
¶ 38 On the contrary, pre-Isla Verde case law suggests that RCW 82.02.020 did not expressly prohibit local government land use regulations similar to the open-space set-aside condition at issue here. See, for example, our 1990 decision in Southwick, Inc. v. City of Lacey.[23] The City of Lacey imposed the following conditions on Southwick, Inc.'s expansion of a funeral home complex and cemetery: (1) construction of street improvements, including street widening, paving, curb, gutter, sidewalk, and street lights; (2) installation of a street light at a driveway access to a road; (3) submission of plans by a registered professional engineer for the street improvements; (4) installation of fire sprinklers; provision of 1500 to 2250 gallons per minute of water to the complex; and (5) installation of fire alarm system within the proposed complex. Southwick, 58 Wash. App. at 888, 795 P.2d 712.
¶ 39 Interpreting RCW 82.02.020, we noted:
Because we have determined that this exaction [the above conditions] is not a tax, we need only determine if it is a fee or charge. A fee, like a tax, is a fixed charge, automatically applied to a designated activity. A charge is an obligation or a price. Arguably, it could include the conditions imposed on various land use and development permits. However, we decline to construe the term so broadly. To do so, would be inconsistent with the broad authority granted to local government in land use matters. The basis for this authority is Const. Art. 11, § 11, which provides: "Any county, city, town or township may make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws." So long as the subject matter is local and the legislation is reasonable, this grant of authority is as broad as the Legislature's authority. Hass v. Kirkland, 78 Wash.2d 929, 932, 481 P.2d 9 (1971).... The courts will not interpret a statute to deprive a municipality of the power to legislate on particular subjects unless that clearly is the legislative intent. State ex rel. Schillberg v. Everett Dist. Justice Court, 92 Wash.2d 106, 108, 594 P.2d 448 (1979). RCW 35A.01.010, the optional municipal code statute, under which Lacey operates, gives the municipality "the broadest powers of local self-government consistent with the Constitution of this state."
Southwick, 58 Wash.App. at 891-92, 795 P.2d 712 (footnote omitted).
2. Caselaw after the Supreme Court's 2002 Isla Verde decision
¶ 40 Moreover, even after the Supreme Court's decisions in R/L Assocs., Inc., and Isla Verde, what constitutes an unlawful "tax, fee, or [other] charge" under RCW 82.02.020 arguably remained unclear. 113 Wash.2d 402, 780 P.2d 838, 146 Wash.2d 740, 49 P.3d 867. As we previously noted, just this year, for example, in Citizens' Alliance, Division One of our court held that a King County ordinance limiting clearing to a maximum of 50 percent on property zoned "rural area residential" constituted an in-kind indirect *730 "tax, fee, or charge" on development, under RCW 82.02.020. 145 Wash.App. 649, 187 P.3d 786 (2008). Although the Citizens' Alliance trial occurred in 2005, after the Supreme Court's 2002 Isla Verde decision, the trial court concluded that the ordinance's clearing limitations did not constitute a "charge" on the development of a type prohibited by RCW 82.02.020. Thus, the trial court's grant of partial summary judgment to King County implies that the lawfulness of these non-fee-related conditions was not clear even three years after the Supreme Court's Isla Verde decision. With all due respect to our dissenting colleague's opposing point of view, Citizens' Alliance demonstrates that even post-Isla Verde, the law concerning the legality or illegality of a non-dedication, non-fee condition of the type at issue here was not clear.
CONCLUSION
¶ 41 Accordingly, we cannot hold, as the dissent posits, that as a matter of law or as an undisputed fact on the record before us, the City knew or reasonably should have known that imposition of its 30 percent open-space set-aside condition on Isla Verde's development was unlawful when the City imposed it in 1995.
¶ 42 Instead, we hold that there remain issues of material fact about whether the City knew or reasonably should have known that it was acting unlawfully when it imposed the mandatory 30 percent open-space set-aside condition on Isla Verde's development. Therefore, we reverse the superior court's order granting summary judgment to Isla Verde and remand for trial on this limited issue of the City's knowledge of the unlawfulness[24] of its act at the time it imposed the 30 percent open-space set-aside as a condition of Isla Verde's final plat approval.[25]
VAN DEREN, C.J.
¶ 43 I respectfully dissent from the majority's conclusion that the matter should be *731 remanded to the trial court for trial on the issue of whether the City knew or should have known that the mandatory open-space set-aside was an unlawful "act" under RCW 82.02.020. I would affirm the trial court and remand only for trial on the issue of damages to Isla Verde.[26]
¶ 44 Washington courts have consistently held that RCW 82.02.020 prohibits a city from imposing not only monetary taxes, but also other conditions that are not a "direct result" of the development's impact. For example, in Southwick, Inc. v. City of Lacey, we held that a city could "force the payment of fees through [agreements, only] after showing that (1) the fee is to mitigate a direct impact, and (2) the fee is reasonably necessary as a direct result of the proposed development." 58 Wash.App. 886, 895, 795 P.2d 712 (1990) (citing RCW 82.02.020). Similarly, Division One of our court has held that a county bore the burden of showing that "required improvements were `reasonably necessary' to mitigate the direct impact of the development" before the county could make them a condition of plat approval. Cobb v. Snohomish County, 64 Wash.App. 451, 459, 829 P.2d 169 (1991) (quoting Southwick, Inc., 58 Wash.App. at 895, 795 P.2d 712).
¶ 45 Then again in July 1994, a full year before the City imposed the 30 percent set-aside condition on Isla Verde in July 1995, our Supreme Court held a preset fee invalid in Henderson Homes, Inc. v. City of Bothell, 124 Wash.2d 240, 877 P.2d 176 (1994). The city of Bothell had conditioned approval of Henderson Homes' subdivision development on payment of a predetermined park-impact fee. Henderson Homes, 124 Wash.2d at 241, 877 P.2d 176. Holding that the legislature intended RCW 82.02.020 to allow municipalities to impose such fees narrowly, the court concluded that Bothell's failure to correlate the preset fees with the development's impact rendered the fee invalid under RCW 82.02.020. Henderson Homes, 124 Wash.2d at 248, 877 P.2d 176.[27]
¶ 46 In considering the City's actions in this case, our Supreme Court repeated, albeit in a footnote, what it and our court have consistently observed: "[I]t has been clear since R/L Associates[, Inc.] v. City of Seattle, 113 Wash.2d 402, 780 P.2d 838 (1989)[[28]] that this court interprets [RCW 82.02.020] according to its plain terms, thus including all charges without regard to whether the payment is a tax or not." Isla Verde Int'l Holdings, Inc. v. City of Camas, 146 Wash.2d 740, 753 n. 8, 49 P.3d 867 (2002). Accordingly, the court held that (1) the City's mandatory open-space set-aside condition was "an in kind, indirect `tax, fee, or charge' on new development" and (2) the City's ordinance *732 mandating this condition violated RCW 82.02.020 because the City had failed to conduct any analysis showing that the mandatory 30 percent open-space set-aside was "reasonably necessary as a direct result of the proposed [subdivisions.]" Isla Verde, 146 Wash.2d at 759 (quoting RCW 82.02.020), 760, 49 P.3d 867.
¶ 47 Thus, I also disagree with the majority that one trial court's lack of understanding of the law in this area is compelling evidence that the law was unclear after Isla Verde. Majority at 730. In Citizens' Alliance for Property Rights v. Sims, 145 Wash.App. 649, 187 P.3d 786 (2008), "the trial court concluded that [a King County ordinance limiting clearing to a maximum of 50 percent on property zoned `rural area residential'] did not constitute a `charge' on the development of a type prohibited by RCW 82.02.020." Majority at 729-30 (internal quotation marks omitted) (quoting Citizens' Alliance, 145 Wash.App. at 653, 187 P.3d 786). On appeal, Division One of this court corrected the trial court and, relying heavily on the Washington Supreme Court's holding in Isla Verde, held that the ordinance was a "tax, fee, or charge" (quoting RCW 82.02.020) for failing to "relate the clearing limit to the nature and extent of the proposed development on the lot" and violated RCW 82.02.020. Citizens' Alliance, 145 Wash.App. at 668, 187 P.3d 786.
¶ 48 Since 1990, well in advance of the City's unlawful act here, the legislature and the Washington courts established that a governmental entity could not legally condition approval of a subdivision on predetermined mandatory conditions, absent an individualized determination of the condition's relation to the development and a need for this condition to mitigate specific identified impacts of the development. Thus, I would hold that the City should have known that its enforcement of the mandatory set-aside ordinance against Isla Verde's development, without a specific showing of need to mitigate specific impacts of Isla Verde's development, violated RCW 82.02.020. Any governmental entity that seeks to burden an owner's right to use private property can reasonably be expected to inform itself of the applicable law before invading or diminishing that right and its failure to do so or its failure to understand the law and properly apply it should not further burden the property owner.
¶ 49 I would affirm the trial court and remand only for determination of Isla Verde's damages under chapter 64.40 RCW.
NOTES
[1] Land Use Petition Act, Chapter 36.70C RCW.
[2] Former CMC § 18.62.020 (1991) provided:
A. Proposals for lands within the city have [sic] a P-suffix zoning designation or being developed as a planned unit development or subdivision or short plat shall retain a minimum of thirty (30%) percent of the site as open space.
B. For the purpose of this section, "open space(s)" shall be defined to mean areas set aside and suitable for active or passive recreation; and areas maintained in a natural state, providing habitat for wildlife, and/or containing significant trees and vegetation. This requirement shall be in addition to any area required to be dedicated to meet standards for the provision of parks, schools, open space or other facilities except that the City may allow up to half (50 [percent]) of the required open space to be credited toward the Open Space Network.
[3] The City's open-space set-aside under former CMC § 18.62.020 differs from a "dedication" in that the developer retains ownership of the open-space set-aside portion of the development on site. The developer does not transfer ownership to the City, as occurs with "dedication" of internal subdivision roads, for example, which then become City-owned and maintained public streets.
[4] The trial court characterized as "voluntary" Isla Verde and the City's negotiating whether Isla Verde could "pay down" the mandatory 30 percent set-aside.
[5] Although the superior court ruled that the City's mandatory open-space set-aside constituted an improper "taking" under the state constitution, we limited our holding to the condition's violation of the takings clause of the federal Constitution. Isla Verde, 99 Wash.App. at 137-38, 990 P.2d 429. Thus, other than mentioning RCW 82.02.020 in a footnote, we did not expressly address whether this condition also violated this statute. Id. at 140 n. 4, 990 P.2d 429.
We reversed the superior court's ruling that the secondary access road condition was improper; and we reinstated this requirement because the road "was designed to prevent a threat to the health, safety, and welfare of [the development's] residents." Id. at 136, 990 P.2d 429. This condition is not at issue in the instant appeal.
[6] The Supreme Court concluded that (1) the open-space set-aside condition violated RCW 82.02.020; (2) no statutory exceptions applied; and (3) therefore, it did not need to reach the constitutional takings issue. Isla Verde, 146 Wash.2d at 764-65, 49 P.3d 867.
[7] Former RCW 82.02.020 (1995) provided, in pertinent part:
Except as provided in RCW 82.02.050 through 82.02.090, no county, city, town, or other municipal corporation shall impose any tax, fee, or charge, either direct or indirect, ... on the development, subdivision, classification, or reclassification of land. However, this section does not preclude dedications of land or easements within the proposed development or plat which the county, city, town, or other municipal corporation can demonstrate are reasonably necessary as a direct result of the proposed development or plat to which the dedication of land or easement is to apply.
[8] Our court commissioner originally denied the City's petition for discretionary review. A panel of judges granted, in part, the City's motion to modify the commissioner's decision: We granted review of only the trial court's summary judgment on the issue of liability under chapter 64.40 RCW.
[9] Requiring administrative remedy exhaustion before initiating a LUPA action in superior court allows the parties to have "an opportunity consistent with due process to make a record on the factual issues." RCW 36.70C.120(1).
[10] The City abandoned negotiating with Isla Verde for an agreed "buy down" and, instead, imposed the mandatory 30 percent open-space set-aside as a condition of final plat approval.
[11] The City also argues that (1) its "litigation-related decisions and actions are not `acts' under RCW 64.40.020"; (2) "liability under RCW 64.40 cannot arise for such conduct"; and (3) the trial court penalized the City's exercise of its right to appeal. Br. of Appellant at 11. These arguments fail.
Read in context, the trial court appears to have been noting that, once engaged in litigation with Isla Verde, (1) the City was on notice that the legality of its ordinance was in question; and (2) thus, the City knew or should have known that Washington case law has definitively held illegal such ordinances as CMC § 18.62.020's imposition of a mandatory, predetermined open-space set-aside, absent a showing that the requirement was necessary to mitigate a specific negative impact created by the proposed development. For example, the trial court reasoned:
Clearly, at this juncture, the City should have known that the ordinance as applied was invalid. The wealth of reported case law in existence at this time supports this conclusion. Thus I find that the City's actions in defending the ordinance after the issue was raised, invokes the ramifications of RCW 64.40.
CP at 389. Thus, the trial court did not treat the City's litigation conduct as the "unlawful act" at issue here.
[12] Inherent in this issue of material fact is the related, mixed issue of law and factwhether, before the Supreme Court's 2002 Isla Verde holding, there was any case law or other ruling reasonably putting the City on notice that an ordinance based mandatory open-space set-aside of the type at issue here was unlawful under RCW 82.02.020, which expressly prohibits levying only "any tax, fee, or charge, either direct or indirect" on a development.
[13] Isla Verde, 99 Wash.App. at 130-31, 990 P.2d 429.
[14] See, for example Washington Const. art. XI, § 11 and RCW 35A.01.010 which allow reasonable governmental regulations, such as zoning, set backs, and other restrictions as part of the local government's so-called "police power." See Hass v. Kirkland, 78 Wash.2d 929, 932, 481 P.2d 9 (1971).
[15] Unlike the trial court, we cannot say as a matter of law that a condition analogous to the City's 30 percent open-space set-aside condition had ever been held unlawful in 1995, when the City imposed it on Isla Verde's development. Footnote 3 from our Isla Verde opinion illustrates the lack of clarity in this emerging area of law even in 1999. In footnote 3, we cited the latest United States Supreme Court case at the time, City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 119 S.Ct. 1624, 143 L.Ed.2d 882 (1999), which expressly defined the term "exaction" to be "the dedication of property to public use." (Emphasis added.)
The City, citing City of Monterrey [Monterey] v. Del Monte Dunes at Monterrey [Monterey], Ltd., 526 U.S. 687, 702, 119 S.Ct. 1624, 1635, 143 L.Ed.2d 882 (1999), argues that the Dolan proportionality standard does not apply here because there was no "exaction" as the United States Supreme Court uses that term"the dedication of property to public use." We disagree for the following reasons: (1) the language in Del Monte Dunes defining exactions is nonbinding dicta, see Honesty in Envtl. Analysis and Legislation (HEAL) v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 96 Wash.App. 522, 534, 979 P.2d 864 (1999) (holding that Del Monte Dunes dicta did not control applicability of Nollan [v. California Coastal Com'n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987)]/Dolan [v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994)] to Growth Management Act regulations); and (2) even if Del Monte Dunes did control, the evidence indicates that the set-aside requirement was an exaction under the circumstances here. The City required Isla Verde to convey ownership of the property to the subdivision homeowner's association to meet the general public's perceived need for open space. See River Birch Assoc. v. City of Raleigh, 326 N.C. 100, 388 S.E.2d 538, 543 (1990) (conveyance of open space to homeowner's association equivalent to a dedication).
Isla Verde, 99 Wash.App. at 140 n. 3, 990 P.2d 429.
In Monterey, the United States Supreme Court did not address a restrictive on-site land use regulation (of the type at issue here) that did not require actual dedication of private property for public use. Apparently finding no binding federal or Washington cases on point, in rendering our Isla Verde decision in 1999, we cited a North Carolina case, River Birch, 388 S.E.2d at 543 (conveyance of open space to homeowner's association equivalent to a dedication), to support our holding that the City's restriction of Isla Verde's use of roughly one-third of its development was the functional equivalent of an "exaction" or dedication for purposes of takings analysis under the Fifth Amendment to the federal Constitution.
[16] Former CMC § 18.62.020 provided in pertinent part:
A. Proposals for lands within the city that are zoned for single-family or multifamily residential use shall retain a minimum of thirty percent of the site as open space.
B. For the purpose of this section, "open space(s)" shall be defined to mean areas set aside and suitable for active or passive recreation; and areas maintained in a natural state, providing habitat for wildlife, and/or containing significant trees and vegetation. This requirement shall be in addition to any area required to be dedicated to meet standards for the provision of parks, schools, open space or other facilities except that the city may allow up to half of the required open space to be credited toward the open space network.
C. To the extent possible, open space areas on a site should contain forested areas, significant trees, wildlife habitat for protected species, and any environmentally sensitive areas located on the site as identified on the city sensitive areas maps or discovered in the field. Where possible, individual open space areas should be contiguous to other existing or planned open spaces so as to permit creation of a larger contiguous area or a continuous corridor. Except where developed for active recreation, open space areas are to be maintained in a natural and undisturbed state.
D. Open space areas shall be protected and preserved through a permanent protective mechanism acceptable to the city. This may include placing the open space area in a separate tract; execution of a protective easement; or dedication to a public agency or public or private land trust. The mechanism or agreement shall provide for maintenance.
See Isla Verde, 146 Wash.2d at 746-47, n. 2, 49 P.3d 867.
[17] Trimen Dev. Co. v. King County, 124 Wash.2d 261, 877 P.2d 187 (1994) (developers required either to dedicate a portion of land for the benefit of residents in the area or to pay a fee in lieu of the dedication); Vintage Constr. Co. Inc. v. City of Bothell, 83 Wash.App. 605, 922 P.2d 828 (1996) (developer required to pay $400 per lot fee in lieu of dedicating five percent of land for park purposes). See also View Ridge Park Assocs. v. Mountlake Terrace, 67 Wash.App. 588, 839 P.2d 343 (1992) (developers required to build recreational facilities or to pay a fee in lieu of building the facilities).
[18] The dissent asserts that such open-space set-aside conditions were previously held to be contrary to RCW 82.02.020, citing several cases, including Isla Verde, 146 Wash.2d 740, 49 P.3d 867, in which our Supreme Court considered for the first time whether a non-monetary set-aside condition imposed for plat approval was an unlawful "tax, fee, or charge" on a development within the meaning of RCW 82.02.020. As our discussion above explains, in our view, the Supreme Court's 2002 Isla Verde opinion arguably marks the first time that a Washington court definitively resolved this issue.
The dissent also cites the recent decision filed by Division One of our court in Citizens' Alliance for Property Rights v. Sims, 145 Wash.App. 649, 187 P.3d 786 (2008). Citizens' Alliance is consistent with our previous holding in the instant case as well as our current holding. But Citizens' Alliance does not support the dissent's assertion that the law on this issue before us here was settled in 1995, when King County imposed the condition; on the contrary, arguably this condition was recognized as clearly unlawful only when Division One filed its Citizens' Alliance decision just two months ago. Unlike the procedural posture of the instant case, Citizens' Alliance does not address whether King County knew or reasonably should have known, as a matter of law, that the condition it imposed was unlawful at the time. On the contrary, Division One cites the Supreme Court's decision in the instant case, Isla Verde, supra, to support its holding that King County's imposed condition is now officially unlawful under RCW 82.02.020.
Furthermore, Citizens' Alliance does not involve liability for damages under RCW 64.40.020(1), such as the instant case. Citizens' Alliance does not present the same procedural posture. Thus, although consistent with the clear Isla Verde holdings that the City's 30 percent open-space set-aside condition here was unlawful, Citizens' Alliance has no bearing on the issue before us, namely when the City knew or reasonably should have known that its action was unlawful.
[19] The Supreme Court's footnote 8 suggests that the law on this point was previously clear:
[I]t has been clear since R/L Assocs., Inc. v. City of Seattle, 113 Wash.2d 402, 780 P.2d 838 (1989) that this court interprets [RCW 82.02.020] according to its plain terms, thus including all charges without regard to whether the payment is a tax or not.
Isla Verde, 146 Wash.2d at 753 n. 8, 49 P.3d 867 (emphasis added). Nevertheless, in our view, here it remains an issue of material fact whether the City knew or reasonably should have known that its 30 percent open-space set-aside condition was unlawful in 1995, when it imposed the condition on Isla Verde's development. We reiterate that the issue before us in the instant appeal was not before the Supreme Court in its previous decision.
[20] See Trimen, 124 Wash.2d 261, 877 P.2d 187 (developers required either to dedicate a portion of land for the benefit of residents in the area or to pay a fee in lieu of dedication); Henderson Homes, Inc. v. City of Bothell, 124 Wash.2d 240, 877 P.2d 176 (1994) (developers required to pay $400 per lot as a park-impact mitigation fee); United Dev. Corp. v. City of Mill Creek, 106 Wash. App. 681, 26 P.3d 943 (developer required to pay traffic mitigation and park impact fees), review denied, 145 Wash.2d 1002, 35 P.3d 380 (2001); Vintage Constr., 83 Wash.App. 605, 922 P.2d 828 (developer required to pay $400 per lot fee in lieu of dedicating five percent of land for park purposes); Castle Homes & Dev., Inc. v. City of Brier, 76 Wash.App. 95, 882 P.2d 1172 (1994) (developer required to pay traffic impact mitigation fees); View Ridge, 67 Wash.App. 588, 839 P.2d 343 (developers required to reimburse the city for the proportionate cost of sidewalk construction bordering their properties, and either to build recreational facilities or to pay a fee in lieu of building the facilities).
[21] In contrast here, the City's condition at issue did not require Isla Verde to dedicate land for open space for public use. And Isla Verde did not pay the City a fee in lieu of part of the required on-site 30 percent set-aside for open space: Although Isla Verde and the City had discussed the possibility of a smaller set-aside accompanied by a corresponding offsetting fee, these negotiations failed. Isla Verde, 146 Wash.2d at 749-50, 49 P.3d 867.
[22] See n. 15.
[23] Judge Reed footnoted his opening sentence in Southwick in order to emphasize that the Southwick opinion considered R/L Assocs.:
This case was argued October 3, 1989. The Supreme Court issued R/L Assocs., Inc. v. Seattle, 113 Wash.2d 402, 780 P.2d 838 (1989) on October 12, 1989. After a request from this court, the parties here submitted supplemental briefs on the application of R/L Assocs. to the present case.
Southwick, Inc. v. City of Lacey, 58 Wash.App. 886, 888 n. 1, 795 P.2d 712 (1990). The deference we accorded the City of Lacey was in direct response to the Supreme Court's then recent decision in R/L Associates.
We note that R/L Associates is also the case on which the Supreme Court relied in rendering its 2002 holding in the instant case, Isla Verde, 146 Wash.2d at 753 n. 8, 49 P.3d 867, that it has been clear that RCW 82.02.020 should be interpreted under its plain meaning. However, even with R/L Associates in mind as the footnote above suggests, we held that RCW 82.02.020's prohibition of taxes, fees, or charges on development did not include within its plain meaning non-monetary conditions imposed on developments such as roads, sprinklers, and other infrastructure. With regard to the City's knowledge of unlawfulness, Southwick rendered RCW 82.02.020 unclear as to whether non-monetary set-asides fell within the statute.
[24] We note that the Supreme Court left intact our previous holding that the mandatory 30 percent open-space set-aside condition was unlawful because it violated the takings clause of the Fifth Amendment to the United States Constitution. Isla Verde, 99 Wash.App. at 137-38, 990 P.2d 429. In previously concluding that the City's condition violated the Constitution, we relied on Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994) and Sparks v. Douglas County, 127 Wash.2d 901, 904 P.2d 738 (1995), both of which addressed whether dedications for infrastructure as conditions of subdivision approval bear a reasonable relationship to a need created by the proposed development. Citing Sparks by analogy, we noted:
Dolan is applicable to RCW 82.02.020, which "permits dedications as a condition for subdivision approval if the local government can show the conditions are `reasonably necessary as a direct result of the proposed development or plat to which the dedication of land or easement is to apply.'" Sparks, 127 Wash.2d at 913, 904 P.2d 738 (quoting RCW 82.02.020).
Isla Verde, 99 Wash.App. at 140-41 n. 4, 990 P.2d 429 (emphasis added).
We further note that Sparks was issued in November of 1995, several months after Isla Verde filed its LUPA petition in the instant case. In Sparks, our Supreme Court noted that it was unclear whether Dolan applies to governmentally-required dedication for future road improvements; nevertheless, again consistent with our previous holding in Isla Verde, the Sparks court reiterated Dolan's requirement that there must be a connection between the government's exaction and the development's impact in order to pass constitutional muster.
In extending the Dolan rule to the open-space set-aside condition here, however, we did not have before us nor did we address whether, because of the Dolan decision, the City knew or reasonably should have known that its action here was unlawful where, unlike Dolan, no dedication of land to the public was at issue. Thus, we leave to the superior court on remand to determine whether Isla Verde may submit evidence that the City knew or reasonably should have known that the ordinance-based condition was unlawful under the federal Constitution.
Such determination would then be in addition to submitting for trial the issue of whether the City knew or reasonably should have known that it was acting unlawfully under RCW 82.02.020 when it imposed the mandatory 30 percent open-space set-aside as a condition of Isla Verde's final plat approval.
[25] We reiterate that because the Supreme Court has already conclusively determined that the City engaged in an "unlawful act" for RCW 64.40.020 purposes when it imposed the mandatory 30 percent open-space set-aside condition on Isla Verde's development, this issue is not subject to further litigation on remand.
If it is determined at trial on remand that the City knew or reasonably should have known in 1995 that the 30 percent open-space set-aside condition it imposed on Isla Verde's development was unlawful, then we leave to the trial court to determine how to proceed on the issue of RCW 64.40.020(1) damages, costs, and fees.
[26] Furthermore, I believe that the majority's legal analysis dictates a result in favor of the City, thus making remand for a trial unnecessary on the issue of whether the City knew or should have known that its condition was illegal. The majority holds that it was not until 2002, when our Supreme Court decided Isla Verde Int'l Holdings, Inc. v. City of Camas, 146 Wash.2d 740, 49 P.3d 867 (2002) and "held, arguably for the first time, that (1) the City's mandatory 30 percent open-space set-aside condition was `an in kind indirect `tax, fee, or charge' on new development.'" Majority at 727 (internal quotation marks omitted) (quoting 146 Wash.2d at 759, 49 P.3d 867). In stating its disagreement with the court in Isla Verde, the majority also concludes that "pre-Isla Verde case law suggests that RCW 82.02.020 did not expressly prohibit local government land use regulations similar to the open-space set-aside condition at issue here." Majority at 729. The majority even holds that arguably post-Isla Verde the law was unclear. Majority at 730. Thus, the majority's opinion makes remand for trial on the knowledge issue unwarranted and unduly expensive and time-consuming for the parties. In light of the majority's opinion that the law was and is arguably unclear, a trial on whether the City informed itself of the law or whether, if it did so, it understood the law to prohibit the condition imposed on Isla Verde, constitutes a regrettable use of resources and time.
[27] In contrast, see Trimen Dev. Co. v. King County, in which our Supreme Court upheld a county's imposition of park development fees under RCW 82.02.020 because the fees were "reasonably necessary as a direct result of [the specific] development." 124 Wash.2d 261, 274, 877 P.2d 187 (1994) (citing View Ridge Park Assocs. v. Mountlake Terrace, 67 Wash.App. 588, 599, 839 P.2d 343 (1992)).
[28] In R/L Associates, our Supreme Court held that "a charge on demolition or change in use of residential units certainly constitutes, at least, an indirect charge on either the construction of residential units or the development of land generally." 113 Wash.2d at 407, 780 P.2d 838.
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350 F.Supp.2d 987 (2003)
Alejandro BAUTISTA, Plaintiff,
v.
CRUISE SHIPS CATERING AND SERVICE INTERNATIONAL, N.V., Prestige Cruises N.V., and Costa Crociere, S.P.A., Defendants.
No. 03-60160-CIV.
United States District Court, S.D. Florida.
November 19, 2003.
Order Denying Motion for Reconsideration January 5, 2004.
*988 Charles R. Lipcon, Lipcon Margulies & Alsina, David H. Pollack, Miami, FL, for Alejandro Bautista, plaintiff.
Richard James McAlpin, McAlpin & Brais, Miami, FL, Russell M. Pfeifer, Fertig & Gramling, Fort Lauderdale, FL, for Cruise Ships Catering and Service International, N.V., Prestige Cruises, N.V., Costa Crociere, S.P.A., defendants.
James John Feeney, Shook Hardy & Bacon, Miami, FL, for Costa Cruise Lines, N.V., L.L.C., garnishee.
*989 FINAL JUDGMENT AND ORDER GRANTING MOTION TO DISMISS
DIMITROULEAS, District Judge.
THIS CAUSE is before the Court upon Defendants Cruise Ships Catering and Services International, N.V., Prestige Cruises, N.V., and Costa Crociere, S.p.A.'s Motion to Dismiss on Forum Non Conveniens Grounds [DE-46], Plaintiff Alejandro Bautista's Response [DE-54] and Appendix, [DE-55], and Defendants' Reply [DE-67]. The Court has carefully considered the motion and is otherwise fully advised in the premises.
I. BACKGROUND
This action was brought by a Colombian seaman (Bautista) against Italian (Costa Crociere) and Netherlands Antilles (Prestige Cruises and Cruise Ships Catering and Service International) companies for injuries suffered while Bautista was working aboard a Italian flagged vessel, the M/V Costa Victoria ("Victoria"). The Complaint alleges claims under the Jones Act against Bautista's employer, Cruise Ships Catering and Services International, N.V., and claims for unseaworthiness against Costa Crociere (the owner of the vessel) and Prestige Cruises (the bareboat charterer). Finally, the Complaint seeks to garnish funds from Costa Cruise Lines, N.V. ("Costa Cruise"), a Florida company. Although other Costa Cruise ships visit American ports, the Victoria has infrequently visited the United States. The alleged injury to Bautista occurred on October 16, 2000 while the Victoria was port in Naples, Italy. Bautista slipped on some ice cream and fell. The accident was witnessed by Ricardo Fondino, a fellow crew member who also is from Colombia. Bautista was treated medically on the ship, in Italy and in his native Colombia.
II. DISCUSSION
First, the Court must determine the issue of choice of law. If United States law is applicable, the Court may not dismiss the case on forum non conveniens grounds. If, however, foreign law is applicable, then the Court can exercise discretion in determining whether a forum non conveniens dismissal is appropriate. The applicability of U.S. law depends on eight (8) choice of law factors including: (1) the place of the wrongful act, (2) the law of the ship's flag, (3) the allegiance or domicile of the injured seamen, (4) the allegiance of the shipowner, (5) the place where the shipping articles were signed, (6) the accessibility of the foreign forum, (7) the law of the forum, and (8) the base of operations. Lauritzen v. Larsen, 345 U.S. 571, 583-92, 73 S.Ct. 921, 97 L.Ed. 1254 (1953); Hellenic Lines v. Rhoditis, 398 U.S. 306, 308-09, 90 S.Ct. 1731, 26 L.Ed.2d 252 (1970). These eight factors are not to be applied "mechanically," but they must be viewed in the totality of the circumstances. Rhoditis, 398 U.S. at 308, 90 S.Ct. 1731.
First, the place of the wrongful act factor does not weigh in favor of U.S. law because the alleged wrongful act occurred in Naples, Italy. Second, the law of the flag of the vessel, Victoria, is Italian law; therefore, this factor does not weigh in favor of U.S. law. Next, the allegiance or domicile of the injured seaman is a significant factor. Symonette Shipyards, Ltd. v. Clark, 365 F.2d 464, 467 (5th Cir.1966)[1], cert. denied, 387 U.S. 908, 87 S.Ct. 1690, 18 L.Ed.2d 625 (1967). Because Bautista is a citizen of Colombia, this factor does not *990 favor U.S. law; it would favor Colombian law. Further, the allegiance of the shipowner factor does not favor U.S. law because the vessel is owned by either an Italian or Netherlands Antilles corporation. Next, the fifth factor does not weigh in favor of U.S. law either; there is no evidence that Bautista entered into an employment contract in the United States. In fact, it does not appear that Bautista has even visited the United States.
Next, while the fact that a plaintiff chose to file suit in this forum normally weighs in favor of U.S. law, a weaker presumption applies when the case is brought by a foreign plaintiff, as is the case here. Leon v. Million Air, Inc., 251 F.3d 1305, 1311 (11th Cir.2001). Further, it appears that Bautista can sue in other foreign fora; Defendants have stipulated to jurisdiction in either Colombia, Italy, or the Netherlands Antilles. Thus, this factor slightly favors U.S. law.
Finally, in examining the base of operations factor,[2] the Court must look for a substantial relation that would justify the application of U.S. law. Sigalas v. Lido Maritime, Inc., 776 F.2d 1512, 1518 (11th Cir.1985), citing, Bailey v. Dolphin Int'l, Inc., 697 F.2d 1268, 1276 (5th Cir.1983). The mere fact that the bulk of a company's profits comes from U.S. pockets is insufficient alone to warrant the application of U.S. law. Sigalas, 776 F.2d at 1518. In Fantome, S.A. v. Frederick, 2003 WL 215812, 2003 AMC 275, 279 (11th Cir.2003), the Court found U.S. law applied, where every decision, not made on the ship, was made in Miami Beach. Here, it appears that the vast majority (93%) of Costa's passengers and marketing is from outside the United States. Another Court has ruled that 20% of a company's business coming from the United States did not tip the scales in favor of U.S. jurisdiction. Gutierrez v. Diana Investments Corp., 946 F.2d 455, 457 (6th Cir.1991). At best, taking a cold, objective look at the operational contacts, the degree of Costa's base of operations in the United States is disputed and is an insufficient basis for a decision to utilize U.S. law. See Sigalas, 776 F.2d at 1518; but see, Szumlicz v. Norwegian America Line, Inc., 698 F.2d 1192 (11th Cir.1983). Thus, this factor does not weigh in favor of U.S. law.[3] Accordingly, weighing all of the choice of law factors, the Court finds that the application of U.S. law is not appropriate in this case. Italian or Colombian law would control before U.S. law.
Next, in conducting a forum non conveniens analysis, the Court must take into account various factors including public and private interests. The factors pertaining to the private interests of the litigation include:
the relative ease of access to sources or proof, availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n. 6, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981) (internal citations omitted). The *991 public factors bearing on the question include
the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; and the unfairness in burdening citizens in an unrelated forum with jury duty.
Id. (internal citations omitted).
First, the Court must determine whether an adequate alternate forum exists. La Seguridad v. Transytur Line, 707 F.2d 1304 (11th Cir.1983). A defendant's submission to the jurisdiction of an alternative forum renders that forum available for the purposes of forum non conveniens analysis. Veba-Chemie A.G. v. M/V Getafix, 711 F.2d 1243, 1245 (5th Cir.1983). Here, Defendants have consented to jurisdiction in any of the foreign fora. Further, there is no indication that Italy, Colombia and/or the Netherlands Antilles would afford Bautista no remedy at all. The Court declines to give the affidavit of Henry St. Dahl the weight Plaintiff desires and finds both Mr. De Gonzalo's and Mr. Romanovich's affidavits [DE-48] more persuasive. The Court does not conclude that Colombian Courts are incapable of providing their citizens with justice. Next, the Court must weigh the private interests of the parties in trying the case here rather than overseas. In the present case, medical witnesses are located in Colombia, and the medical records are in Spanish. Further, any witnesses to the incident are unlikely to be American citizens. Specifically, the ship's medical personnel are Italian. Additionally, Bautista was treated in Italy; presumably, the doctors and records are located there. Bautista was then treated in Colombia and recuperated there. Again, presumably, those witnesses are in Colombia. Thus, other than the location of some corporate records in Florida, the bulk of the evidence and witnesses are overseas. Accordingly, private interests do not favor a trial in the United States. At best, the private interests are at equipoise.
In an abundance of caution, the Court will address the public interest factors. Although this district historically has the highest criminal trial caseload of any district in the country, this Court's docket is currently under control so that Court congestion is not a major factor against trying the case here. Of course, the Court's docket could become more congested by the time this case goes to trial. Further, there is no local interest in deciding the case here. Jurors are not likely to be overly concerned about a seaman slipping in ice cream thousands of miles away. The habitual generosity of American juries is not a reason to try the case here. Varnelo v. Eastwind Transport, Ltd., 2003 WL 230741 (S.D.N.Y. Feb. 3, 2003). Overall, the public factors militate in favor of a trial in another jurisdiction. In today's climate of worldwide economies and the internet, there are few companies that have no connection with the United States. However, such a connection alone is insufficient to justify the United States' becoming the Court for all tort disputes in the world. In this case, the major connection to the United States is the law practice of Plaintiff's attorneys. Unlike the plaintiffs in Esfeld v. Costa Crociere S.P.A., 289 F.3d 1300 (11th Cir.2002), Bautista is not a United States citizen. Thus, there is an insufficient justification for a jury in the Southern District of Florida spending its time deciding this case. The case should be tried in Italy or Colombia.
*992 III. CONCLUSION
Based on the foregoing analysis, it is ORDERED AND ADJUDGED as follows:
1. Defendants Cruise Ships Catering and Services International, N.V., Prestige Cruises, N.V., and Costa Crociere, S.p.A.'s Motion to Dismiss on Forum Non Conveniens Grounds [DE-46] is hereby GRANTED;
2. The above-styled case is DISMISSED without prejudice to refiling in an appropriate forum; should none of the alternate fora accept this case, then it may be refiled here;
3. All other pending motions are DENIED AS MOOT;
4. The Clerk shall close this case.
ORDER DENYING MOTION FOR RECONSIDERATION
THIS CAUSE is before the Court upon Plaintiff Alejandro Bautista's Motion for Reconsideration of November 18, 2003 Final Judgment and Order Granting Motion to Dismiss [DE 74], Defendants Costa Crociere S.p.A and Prestige Cruises N.V.'s Response in Opposition [DE 82], and Plaintiff's Reply [DE 85]. The Court has carefully considered the motion and is otherwise fully advised in the premises.
Plaintiff Alejandro Bautista moves the Court to reconsider its Final Judgment and Order Granting Motion to Dismiss, in which the Court dismissed this case on forum non conveniens grounds. There are three major grounds that justify reconsideration: 1) an intervening change in controlling law; 2) the availability of new evidence; and 3) the need to correct clear error or prevent manifest injustice. In re: Managed Care Litigation, No. 00-1334-MD, 2002 WL 1359734, at *1, 2002 U.S. Dist. LEXIS 11809, at *17 (S.D. Fla. June 26, 2002); Sussman v. Salem, Saxon & Nielsen, P.A., 153 F.R.D. 689, 694 (M.D.Fla.1994). In order to demonstrate clear error, the movant must do more than simply restate previous arguments. Garcia v. United States, No. 01-985, 2002 U.S. Dist. LEXIS 23962, at *2 (S.D. Fla Nov. 4, 2002). Further, any arguments the movant failed to raise in earlier motions will be deemed waived. Id. Finally, reconsideration of a previous order "is an extraordinary remedy to be employed sparingly." Sussman, 153 F.R.D. at 694.
In the present case, the Court finds that Plaintiff has failed to show that reconsideration is justified. First, Plaintiff argues in its Motion for Reconsideration that no adequate alternative forum exists because this case involves a Supplemental Rule B attachment. However, Plaintiff failed to previously raise this argument in responding to Defendants' Motion to Dismiss. Further, Plaintiff does not cite to any case law stating that dismissal of a Rule B action on forum non conveniens grounds is inappropriate. Finally, even considering the arguments put forward in the Motion for Reconsideration, the Court affirms its finding that adequate alternative forums exist because there is no indication that Italy, Columbia, and/or the Netherlands Antilles would afford Plaintiff no remedy.
Second, in Plaintiff's Reply in support of its Motion for Reconsideration, Plaintiff states that it has attached to the Reply new evidence concerning the relationship between Carnival Corporation and the Costa Defendants and new evidence of the Costa Defendants' ties to the United States. However, besides stating that these documents are "new evidence," Plaintiff offers no explanation regarding why these documents were not available earlier. Additionally, Plaintiff has already stated in his Response to Plaintiff's Motion to Dismiss Complaint of Forum Non Conveniens Grounds that the Costa Defendants are wholly owned by Carnival *993 Cruise Lines and attached Carnival Corporation's 2002 Filing with the Securities and Exchange Commission in support of that contention. Plaintiff does not explain why further documentation of this same fact constitutes new evidence for the purposes of a motion for reconsideration. Therefore, the Court finds that no new evidence has been presented by Plaintiff to justify reconsideration, and this Court's Final Judgement and Order Granting Motion to Dismiss was not clear error and did not create manifest injustice.
Accordingly, it is ORDERED AND ADJUDGED as follows:
1. Plaintiff Alejandro Bautista's Motion for Reconsideration of November 18, 2003 Final Judgment and Order Granting Motion to Dismiss [DE 74] is hereby DENIED;
2. Plaintiff Alejandro Bautista's Request for Oral Argument on Plaintiff's Motion for Reconsideration of November 18, 2003 Final Judgment and Order Granting Motion to Dismiss [DE 76] is hereby DENIED.
NOTES
[1] The Eleventh Circuit, in Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), adopted as binding precedent all decisions of the former Fifth Circuit rendered prior to October 1, 1981.
[2] Some courts have held that the base of operations factor alone, does not warrant a U.S. choice of law determination, Warn v. M/Y Maridome, 169 F.3d 625, 629 (9th Cir.), cert. denied, 528 U.S. 874, 120 S.Ct. 179, 145 L.Ed.2d 151 (1999).
[3] This Court declines to give Judge Freedman's decision in the state case the effect that Plaintiff suggests.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-7172
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
KAVIN DATRON WILLIAMS,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Greenville. James C. Dever III,
Chief District Judge. (4:10-cr-00088-D-1)
Submitted: April 8, 2016 Decided: April 18, 2016
Before DUNCAN, KEENAN, and DIAZ, Circuit Judges.
Vacated and remanded by unpublished per curiam opinion.
Kavin Datron Williams, Appellant Pro Se. Barbara Dickerson
Kocher, Jennifer P. May-Parker, Assistant United States
Attorneys, Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Kavin Datron Williams appeals the district court’s order
denying his 18 U.S.C. § 3582(c)(2) (2012) motion for a sentence
reduction pursuant to Sentencing Guidelines Amendment 782. In
denying Williams’ motion, the district court determined that
Williams received a statutory minimum sentence. See United
States v. Williams, No. 4:10-cr-00088-D-1 (E.D.N.C. July 9,
2015). We ordered the Government to file a response addressing
whether (1) the Government opposes Williams’ 18 U.S.C.
§ 3582(c)(2) motion; and (2) an 18 U.S.C. § 3582(c)(2) movant
may obtain relief from the statutory minimum sentence
established at sentencing where he committed his offense before
the effective date of the Fair Sentencing Act (FSA) but was
sentenced after the effective date of the FSA and before the
United States Supreme Court’s decision in Dorsey v. United
States, 132 S. Ct. 2321 (2012).
In its response, the Government asserts that Williams did
not receive a statutory minimum sentence and may be eligible for
a sentencing reduction under 18 U.S.C. § 3582(c)(2). The
Government has filed a motion to vacate the district court’s
order and remand the case to the district court to allow further
development of the record. Williams agrees with the motion.
Accordingly, we grant the Government’s motion to vacate and
remand, vacate the district court’s July 9, 2015 order, and
2
remand for further proceedings. We deny, as moot, Williams’
motion to appoint counsel to respond to the Government’s motion
to vacate and remand. We dispense with oral argument because
the facts and legal contentions are adequately presented in the
materials before this court and argument would not aid the
decisional process.
VACATED AND REMANDED
3
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910 A.2d 1224 (2006)
Townsend D. THORNDIKE
v.
Charles E. THORNDIKE.
No. 2005-737.
Supreme Court of New Hampshire.
Argued: September 13, 2006.
Opinion Issued: November 30, 2006.
*1225 Wiggin & Nourie, P.A., of Manchester (W. Wright Danenbarger on the brief), and Lyne, Woodworth & Evarts, LLP, of Boston, Massachusetts (Edmund Polubinski, Jr., on the brief and orally), for the petitioner.
Gallagher, Callahan & Gartrell, P.A., of Concord (Michael R. Callahan and Thomas J. Schlesinger on the brief, and Mr. Callahan orally), for the respondent.
GALWAY, J.
The petitioner, Townsend D. Thorndike, appeals an order of the Superior Court (Perkins, J.) ruling that the statute of limitations barred his petition for equitable relief and damages. We affirm.
Because the petitioner appeals a motion to dismiss, we assume the truth of the following facts asserted by the petitioner. The petitioner and the respondent, Charles E. Thorndike, are brothers and shareholders in a corporation known as Annalee Mobilitee Dolls, Inc. (AMD), which produces and sells collectible dolls. The business was started by the brothers' parents in 1951, and the brothers began working at AMD in the early 1970s. From the early 1970s to the 1990s, the major business decisions for AMD were made unanimously by all Thorndike family members. In 1992, the parents gave 48 percent of the business's voting stock to the petitioner and 48 percent to the respondent, leaving 2 percent to each parent. At this time, the *1226 family agreed that all four family members would be directors of AMD. In 1995, the parents gave day-to-day control of the business to the respondent, but it was agreed upon by all shareholders and directors that the petitioner would retain a directorship and a significant management position. The shareholders and directors further agreed that the brothers would continue to share equally in the income from the business.
The petitioner alleges that, after the respondent gained control of day-to-day operations, he and his parents added people who were neither shareholders nor Thorndike family members to AMD's board of directors. The parents also transferred their voting stock to a voting trust under the control of one of the new board members. The respondent and the new board members then removed the petitioner from his position as a director and from any management role in AMD. The respondent reduced the salaries of his parents and the petitioner to zero, due to losses suffered by the company, but continued to pay himself and the outside directors. The losses that began after the petitioner's removal from management totaled in the millions of dollars. In 1997, AMD's financing bank terminated AMD's line of credit and demanded full repayment of loans. In response to these losses, the respondent invested some of his own money into AMD. In exchange, he and the new board members caused AMD to issue convertible notes to the respondent, which were convertible to voting stock and would, if converted, increase the respondent's voting power and decrease the petitioner's.
The petitioner alleges that, prior to February 18, 2002, the respondent: (1) converted the convertible notes to voting stock, thus diluting the petitioner's voting power; (2) denied the petitioner information regarding AMD's operations; (3) continued to pay himself a salary and not pay the petitioner a salary; (4) refused to allow the petitioner to participate in the business; and (5) banned the petitioner from AMD's premises and prohibited contact between the petitioner and AMD employees.
The petitioner alleges that, after February 18, 2002, the respondent: (1) continued to exclude the petitioner from employment with AMD; (2) refused to provide the petitioner with copies of AMD's tax returns; (3) continued to pay himself a salary and not pay the petitioner; (4) continued to refuse to allow the petitioner to participate in AMD's operations; (5) continued to ban the petitioner from AMD's premises; (6) failed to hold the 2004 AMD shareholders' meeting; and (7) caused AMD to fail to pay rent to C&T Partnership, a real estate partnership owned by the petitioner and the respondent that leases real estate to AMD.
Based upon the above events, the petitioner filed a petition for equitable relief and damages on February 18, 2005. The petitioner alleged that, as the controlling shareholder of a closely-held corporation, the respondent breached his enhanced fiduciary duty to the petitioner, a minority shareholder, by defeating the petitioner's reasonable expectations and freezing him out from AMD. The respondent moved to dismiss the petition, arguing that the petition was barred by the statute of limitations. The trial court granted the motion to dismiss, concluding that the petitioner's claims all arose from facts that occurred and were known to the petitioner more than three years prior to the filing of the petition on February 18, 2005.
On appeal, the petitioner argues that the trial court erred in granting the motion to dismiss because the events that occurred before and after February 18, 2002, were *1227 all part of a plan to freeze-out the petitioner from AMD, and thus constituted a continuing tort. Because corporate freeze-out is a continuing tort, the petitioner argues, all of the breaches of fiduciary duty that the respondent committed are actionable as one tort. The petitioner argues in the alternative that, even if the statute of limitations bars an action based upon events occurring before February 18, 2002, the events occurring after that date are actionable as independent torts. The respondent argues that the trial court correctly ruled that the petitioner's claim is barred by the three-year statute of limitations imposed upon personal actions. See RSA 508:4, I (1997).
In reviewing a trial court's ruling on a motion to dismiss, we consider whether or not the petitioner's allegations are reasonably susceptible of a construction that would permit recovery. Cadle Co. v. Dejadon, 153 N.H. 376, 378, 904 A.2d 605 (2006). Although we assume the truth of the facts alleged in the petitioner's pleadings and construe all reasonable inferences in the light most favorable to him, we will uphold the granting of the motion to dismiss if the facts pled do not constitute a basis for legal relief. Perez v. Pike Inds., 153 N.H. 158, 159-60, 889 A.2d 27 (2005).
We have never explicitly adopted the tort of corporate freeze-out, although we have assumed its existence arguendo. Kennedy v. Titcomb, 131 N.H. 399, 403, 553 A.2d 1322 (1989). For the purposes of our discussion below, we will assume without deciding that the tort of corporate freeze-out exists in New Hampshire. We now address the petitioner's claim that the tort of corporate freeze-out is a continuing tort.
When a tort is of a continuing nature, "although the initial tortious act may have occurred longer than the statutory period prior to the filing of an action, an action will not be barred if it can be based upon the continuance of that tort within that period." Nordic Inn Condo. Owners' Assoc. v. Ventullo, 151 N.H. 571, 581, 864 A.2d 1079 (2004). This is known as the "continuing wrong" doctrine. Id. at 581-82, 864 A.2d 1079. Courts have traditionally applied this doctrine to the torts of trespass and nuisance, John Beaudette, Inc. v. Sentry Ins., 94 F.Supp.2d 77, 107 (D.Mass.1999) (summarizing the law of continuing wrong in Massachusetts as limited to actions in nuisance and trespass); Jacques v. Pioneer Plastics, Inc., 676 A.2d 504, 506 (Me.1996) (stating that Maine has long recognized claims for continuing trespass and continuing nuisance), although some courts have applied the doctrine to other areas of tort law, such as civil rights, property damage, and antitrust. See Blazer Foods v. Restaurant Properties, 259 Mich.App. 241, 673 N.W.2d 805, 810 (2003) (summarizing the Michigan Supreme Court's use of the continuing wrong doctrine as limited to actions in trespass, nuisance, and civil rights violations); Wenigar v. Johnson, 712 N.W.2d 190, 209 (Minn.Ct. App.2006) (stating that the continuing wrong doctrine is most commonly applied in Minnesota to discrimination cases involving wrongful acts that take place over a period of time); Holland v. City of Geddes, 610 N.W.2d 816, 818 (S.D.2000) (applying the continuing wrong doctrine to repeated water damage caused by a city's failure to fix a malfunctioning water line); DXS, Inc. v. Siemens Medical Systems, Inc., 100 F.3d 462, 467 (6th Cir.1996) (describing a continuing antitrust violation as a violation in which the plaintiff's interests are repeatedly invaded and requiring an overt act to restart the statute of limitations). We recently stated that trademark infringement is widely recognized to be of a continuing nature. Nordic Inn Condo. *1228 Owners' Assoc., 151 N.H. at 581-82, 864 A.2d 1079.
Although we have never before determined whether freeze-out is a continuing tort, Massachusetts courts have directly addressed that issue and declined to extend the continuing wrong doctrine to include freeze-out. Houle v. Low, 407 Mass. 810, 556 N.E.2d 51, 53 (1990); Kirley v. Kirley, 25 Mass.App.Ct. 651, 521 N.E.2d 1041, 1043 (1988). In Houle, the Massachusetts Supreme Judicial Court held that the injuries suffered by a plaintiff alleging corporate freeze-out did not transform the alleged wrongdoing into a continuing tort. Houle, 556 N.E.2d at 53. The Houle court determined that a cause of action for freeze-out arose at a specific time: when the defendant shareholders notified the plaintiff shareholder of their decision to exclude him from a business venture. Id. We concur with this reasoning and conclude that the wrongdoing alleged by the petitioner in this case is not a continuing wrong. Even if all that the petitioner alleges is true, and the respondent continues to exclude him from employment at AMD, continues to take a salary without paying a salary to the petitioner, continues to refuse to permit him to participate in AMD's operations, and continues to ban him from AMD's premises, the acts causing the petitioner's injuries occurred prior to February 18, 2002, and the statute of limitations began to run when the acts occurred. Accordingly, we affirm the trial court's ruling that any action based upon events that occurred prior to February 18, 2002, is barred by the statute of limitations.
The petitioner next argues that, even if the statute of limitations bars consideration of events that occurred prior to February 18, 2002, the events that occurred thereafter constitute a freeze-out. Based upon the record before us, however, it appears that the petitioner never argued before the trial court that the events occurring after February 18, 2002, by themselves, constitute a freeze-out. "It is a long-standing rule that parties may not have judicial review of matters not raised in the forum of trial." Bean v. Red Oak Prop. Mgmt., 151 N.H. 248, 250, 855 A.2d 564 (2004). It is the burden of the appealing party to provide this court with a record sufficient to decide the issues raised on appeal and to demonstrate that the appellant raised those issues before the trial court. Id. Because our rules affirmatively require the moving party to demonstrate where each question presented on appeal was raised below, see Sup.Ct. R. 16(3)(b), failure of the moving party to comply with these requirements may be considered by the court regardless of whether the opposing party objects on those grounds. Bean, 151 N.H. at 250, 855 A.2d 564. At trial, the petitioner did not distinguish between events occurring before and after February 18, 2002, and, in fact, the petitioner did not mention that date in either the petition or at the hearing before the trial court. The argument that the petitioner consistently presented to the trial court was that the respondent engaged in a course of conduct beginning in 1995 that increasingly excluded the petitioner from AMD. Further, the petitioner's appeal does not refer to any location in the record where he asked the trial court to consider solely the events occurring after February 18, 2002 as a freezeout. Accordingly, we decline to address the petitioner's argument that the events occurring after February 18, 2002, by themselves, constituted a freeze-out.
Affirmed.
DALIANIS and DUGGAN, JJ., concurred.
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872 So.2d 1078 (2004)
STATE of Louisiana
v.
William SMITH.
No. 2004-KO-0050.
Supreme Court of Louisiana.
May 7, 2004.
Denied.
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NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT OCT 25 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
VENTJE CORNELIS SINGKOH; No. 09-71184
GLORIA MAENGKOM,
Agency Nos. A097-887-314
Petitioners, A098-450-949
v.
MEMORANDUM*
ERIC H. HOLDER Jr., Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Argued and Submitted October 10, 2013
San Francisco, California
Before: HAWKINS, N.R. SMITH, and NGUYEN, Circuit Judges.
Ventje Cornelis Singkoh (“Singkoh”) seeks review of the Board of Immigration
Appeals’ (“BIA”) order affirming an Immigration Judge’s (“IJ”) denial of his
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
application for asylum,1 withholding of removal and protection under the Convention
Against Torture (“CAT”). Because the BIA conducted a de novo review of the record,
making its own findings based on its independent review, our review is limited to the
BIA’s decision. Singh v. Ashcroft, 351 F.3d 435, 438 (9th Cir. 2003).
Although, as the BIA noted, Singkoh’s asylum filing was well beyond the
presumptive six-month deadline after falling out of legal status, see Al Ramahi v.
Holder, 725 F.3d 1133, 1135 (9th Cir. 2013), we have held this factor is not by itself
determinative, id. at 1138; see also Wakkary v. Holder, 558 F.3d 1049, 1057-58 (9th
Cir. 2009). Here, the BIA failed to address the individualized factual circumstances
Singkoh proffered to explain the delay, see Al Ramahi, 725 F.3d at 1138, noting only
that Singkoh was “familiar with the immigration laws of this country and was even
aware of individuals in his church applying for asylum.” However, Singkoh did not
argue he was unaware of the general availability of asylum, but that he did not seek
1
We must determine whether we have jurisdiction to consider Singkoh’s
petition for review with respect to his asylum claim. We have held that we “may
review the BIA’s application of the changed or extraordinary circumstances exception
when the historical facts are undisputed.” Al Ramahi v. Holder, 725 F.3d 1133, 1138
(9th Cir. 2013) (citing Ramadan v. Gonzales, 479 F.3d 646, 650 (9th Cir. 2007)).
Here, there is no factual dispute as to when Singkoh fell out of legal status or when
he actually filed for asylum, leaving for our consideration only whether the BIA
adequately addressed his proffered explanations for the time between these events, as
discussed below. Cf. Sumolang v. Holder, 723 F.3d 1080, 1082 (9th Cir. 2013)
(finding no jurisdiction where BIA’s ruling rested on IJ’s resolution of an underlying
factual dispute).
2
that form of relief earlier because he was relying on the church’s efforts to get his
status adjusted. Once he realized those various attempts had ultimately and finally
failed, Singkoh contends he moved reasonably to seek a new attorney and file for
asylum within two months after he retained his last attorney. We express no opinion
on the reasonableness of this delay, but remand for the BIA to specifically address
Singkoh’s proffered justifications for his delay in filing for asylum. Cf. Wakkary, 558
F.3d at 1058-59.
With respect to Singkoh’s claim for withholding of removal, the evidence does
not compel the conclusion that the events experienced by Singkoh in Indonesia rise
to the level of past persecution. See id. at 1059-60; Halim v. Holder, 590 F.3d 971,
975-76 (9th Cir. 2009). However, a decision of our court filed after the BIA’s
decision in this case held that all Christians in Indonesia (and not just those of Chinese
descent) should be treated as a disfavored group, and thus may impact the BIA’s
ruling regarding Singkoh’s reasonable fear of future persecution. See Tampubolon v.
Holder, 610 F.3d 1056, 1060-62 (9th Cir. 2010); see also Wakkary, 558 F.3d at 1064
(“The more evidence of group targeting an . . . applicant proffers, the less evidence
of individually specific evidence he needs.”). We remand so that the BIA may also
address the impact of this decision on Singkoh’s claim of well-founded fear of future
persecution in the first instance.
3
The evidence does not compel the conclusion Singkoh would be tortured if
returned to Indonesia, and we therefore deny Singkoh’s petition with respect to his
CAT claim. See Wakkary, 558 F.3d at 1068 (“[T]he record contains no evidence
whatsoever that Wakkary is likely to be tortured, rather than persecuted, by
government officials or with their acquiescence on return to Indonesia.”).
REMANDED IN PART and DENIED IN PART. The parties shall bear their
own costs on appeal.
4
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FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D19-976
_____________________________
ELIJAH MOORE, JR.,
Appellant,
v.
STATE OF FLORIDA,
Appellee.
_____________________________
On appeal from the Circuit Court for Taylor County.
Gregory S. Parker, Judge.
September 18, 2019
PER CURIAM.
AFFIRMED.
LEWIS, OSTERHAUS, and KELSEY, JJ., concur.
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
Elijah Moore, Jr., pro se, Appellant.
Ashley Moody, Attorney General, and Quentin Humphrey,
Assistant Attorney General, Tallahassee, for Appellee.
2
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944 A.2d 789 (2007)
COM.
v.
BRYANT.
No. 140 MDA 2007.
Superior Court of Pennsylvania.
November 15, 2007.
Affirmed.
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15 So.3d 1185 (2009)
Barbara FORTIER, Cheron and Harold Baquet, and David Frere, Members of the Congregation of Our Lady of Good Counsel Roman Catholic Church
v.
Most Rev. Alfred HUGHES, S.T.D., Most Rev. Roger P. Morin, Rev. Patrick Collum and the Roman Catholic Archdiocese of New Orleans.
No. 2009-CA-0180.
Court of Appeal of Louisiana, Fourth Circuit.
June 17, 2009.
*1186 Virginia W. Gundlach, Genevieve M. Hartel, Erin N. Beck, Jones Walker Waechter Poitevent Carrere & Denegre, LLP, New Orleans, LA, for Plaintiffs/Appellants.
Richard A. Bordelon, Ralph J. Aucoin, Todd R. Gennardo, Denechaud and Denechaud, L.L.P., New Orleans, LA, for Defendants/Appellees.
(Court composed of Judge DAVID S. GORBATY, Judge EDWIN A. LOMBARD, Judge ROLAND L. BELSOME).
DAVID S. GORBATY, Judge.
In this appeal, plaintiffs contend that the trial court erred in granting defendants' exceptions of no right of action and lack of subject matter jurisdiction. For the reasons set forth below, we affirm.
FACTS AND PROCEDURAL HISTORY
On October 14, 2008, Archbishop Alfred C. Hughes signed a canonical decree "suppressing" Our Lady of Good Counsel church parish, effective October 17, 2008. On October 20, 2008, plaintiffs filed a petition for injunctive relief, including a temporary restraining order, seeking to prevent the closure, or "suppression," of Our Lady of Good Counsel parish. The trial court denied the temporary restraining order. Subsequently, on October 28, 2008, the trial court granted Defendants' exceptions of no right of action and lack of subject matter jurisdiction, and denied plaintiffs' request for a preliminary injunction on the same issue. The trial court also denied plaintiffs' request to amend their petition to add a claim for fraud and a claim that they are third party beneficiaries of the corporate charter. Plaintiffs subsequently filed this appeal.
DISCUSSION
Plaintiffs argue that the trial court erred in granting the exception of no right of action. The congregants are members of the non-profit entity known as The Congregation of Our Lady of Good Counsel Roman Catholic Church. The Articles of Incorporation state that The Congregation of Our Lady of Good Counsel was established for the benefit of its membersthat is, those belonging to the corporation, plaintiffs argue. The Articles describe the Archbishop, the Vicar General, and the Pastor as members of the Congregation of Our Lady of Good Counsel Roman Catholic Church because they would not otherwise be members. Article 3 does not define or list the members of the corporation or limit the Congregation's membership to the Archbishop, the Pastor, and the Vicar General, according to plaintiffs.
Peremptory exceptions raising the objection of no right of action are reviewed de novo on appeal as they involve questions of law. Turner v. Law Firm of Wolff & Wolff, 07-1589, p. 2 (La.App. 4 Cir. 6/4/08), 986 So.2d 889, 891.
*1187 Under La. R.S. 12:208, only members of a corporation may bring an action to challenge an act of the corporation:
(A) Invalidity of an act of a corporation, or conveyance or transfer of movable or immovable property to or by a corporation, by reason of the fact that the corporation was without capacity or power to perform such act or to make or receive such conveyance or transfer may be asserted only:
(1) In an action by a member of the corporation to set aside such act ...
(2) In an action by a member against the corporation to enjoin the performance of any act or transfer of movable or immovable property ...
Article 3 of the Articles of Incorporation contains the only reference to the identity of the members of the corporation. It provides, in pertinent part:
The Most Reverend Archbishop, the Vicar General, and the Pastor of said Congregation shall be and remain members of this corporation and members of the board of directors thereof ...
No other definition of the identity of the members of the corporation appears anywhere else in the document.
Plaintiffs assert that they are members of the corporation "named for the people." Plaintiffs also urge that the opening paragraph of the Articles describing two laymen, Louis Pfister and John Dwyer, as "members of said Congregation" designates that they are members of the corporation.
The words of a contract must be given their generally prevailing meaning. La. C.C. art.2047. When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. La. C.C. art.2046.
Neither the name of the corporation, nor the label plaintiffs give themselves as "members of the congregation" is of any consequence here. The fact that the name of the Corporation contains the word "Congregation" does not serve to override the clear intent of the Articles of Incorporation as set forth in Article 3. In Article 3, the Archbishop, Vicar General and Pastor of the Congregation are clearly named as members of the corporation and members of the board of directors. Pfister and Dwyer are named as members of the board of directors, but are not named as members of the corporation. Plaintiffs' reading of Article 3 would lead to an absurd result, and contradicts the clear language of the document.
Further, plaintiffs' argument that the Archbishop, the Vicar General, and the Pastor are only named members of the corporation because they would not otherwise be members of the corporation is mere speculation and supposition, with no evidence introduced in support of it. It is clear that only the Archbishop, the Vicar General, and the Pastor were named "members of the corporation" in Article 3. No further interpretation is required or allowed by law.
Plaintiffs' argument that Article 2 of the Articles of Incorporation establishes that congregants, or parishioners, are members of the corporation is flawed. Article 2 states that the purpose of the corporation is to "hold and administer property for religious purposes, in that the same may be devoted to religious services for the benefit of those who attend the Roman Catholic Church, belonging to this corporation." The quoted language does not provide that those people who attend the Roman Catholic Church belong to the corporation. Rather, the Roman Catholic Church attended by the parishioners belongs to the corporation. Furthermore, Article 2 does not abrogate the clear language contained in Article 3 naming the members of the corporation.
*1188 Plaintiffs urge that members of a corporation do not have to be identified in the Articles of Incorporation; they can be admitted to the corporation at a subsequent date. However, here, Article 3 states who the members are, and there have been no subsequent amendments to the Articles to include any other members. The affidavit of Barbara Fortier, one of the plaintiffs, attesting that a membership register of the members of the "Congregation" is kept does not establish that these people are members of the corporation. The church registry does not amount to an amendment to the Articles of Incorporation. The fact that plaintiffs are parishioners of a church parish and are registered as such does not elevate them to the position of a corporate member, when they are not identified as such in the Articles of Incorporation.
Making contributions to the Church also does not make plaintiffs members of the corporation. The caselaw cited by plaintiffs is distinguishable. In Palermo, plaintiffs paid a membership fee and annual dues that were provided for in the bylaws of the corporation. Palermo v. Old Tram Hunting Club, 227 So.2d 644 (La. App. 3 Cir.1969). In the case at bar, the Articles of Incorporation do not provide, explicitly or otherwise, that parishioners who make contributions to the Church are members of the corporation.
The clear and unambiguous language of the Articles of Incorporation identifies only three members of the corporation: the Archbishop, the Vicar General, and the Pastor. The trial court correctly recognized that the plaintiffs are not members of the corporation, and therefore have no right of action. The plaintiffs' assignment of error is without merit.
Plaintiffs assert that the trial court erred in denying their request to amend their petition to add a claim for fraud and a claim that they are third party beneficiaries of the corporate charter. The decision to allow a plaintiff to amend under La. C.C.P. art. 934 is within the discretion of the trial court, and will not be disturbed absent manifest error. Massiha v. Beahm, LAMMICO, and ABC, XXXX-XXXX (La.App. 4 Cir. 8/15/07), 966 So.2d 87. La. C.C.P. art. 934 does not permit amendments to a petition that change the substance of the original claims. Id.
Plaintiffs originally filed a derivative action. No reference was made in the petition to any cause of action arising out of fraud. Further, plaintiffs now seek damages instead of injunctive relief, which was sought in the initial petition. Additionally, plaintiffs did not allege that they were third party beneficiaries of the corporate charter in their original petition. Plaintiffs' proposed amendments do not amplify or clarify their original claim; they change its substance. As such, we find that the trial court did not abuse its discretion in denying plaintiffs the right to amend.
In light of these rulings, plaintiffs' remaining assignment of error is moot, and we need not address it.
CONCLUSION
Accordingly, for the foregoing reasons, the judgment of the trial court is affirmed.
AFFIRMED.
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118 So.2d 446 (1960)
239 La. 379
SUN OIL COMPANY and Humble Oil & Refining Company
v.
Amadeo ROGER et al.
No. 43937.
Supreme Court of Louisiana.
February 15, 1960.
Rehearing Denied March 21, 1960.
*447 Robert D. Morvant, Thibodaux, for defendants-appellants.
Donald L. Peltier, Harvey Peltier, Pugh, Lanier & Pugh, Deramee & Deramee, Thibodaux, Blanchard & Blanchard, Farrell A. Blanchard, Donaldsonville, for defendants-appellees.
FOURNET, Chief Justice.
The plaintiffs Sun Oil Company and Humble Oil & Refining Company, producers of minerals under leases covering certain lands in Lafourche Parish claimed by opposing groups, in order to determine the ownership of the royalties accruing from the said production,[1] provoked the instant concursus proceeding and deposited the funds in the Registry of Court, naming as defendants the various claimants who, because of their number, agreed to divide themselves into two groups by which they have been known throughout these proceedings, i. e. Group A and Group B; and from a judgment in favor of the former, the latter have appealed.
The land affected by the mineral leases was acquired by Eugene Guillot during his marriage to Honorine Thibodaux; of the union there were eight surviving children. Eugene Guillot died in May, 1903, and his wife died in March, 1917, both intestate. On April 4, 1917, one of the children, Estillina Guillot, and her husband, Joseph Vendome Roger, opened the successions of her father and mother and filed joint application to be appointed administrators of their successions. Following publication of notice of application, and certification that no opposition thereto had been filed, on April 17, 1917, the applicants were appointed by the District Judge joint administrators of the said successions. On the same date an inventory was made, showing movable property (a bed, chair and armoire) appraised at $5, and immovable property (the tract of land the ownership of which is in dispute) appraised at $500; and the required bond having been filed, Letters of Administration were issued. On April 23, 1917, pursuant to the Administrators' petition representing that the Successions owed debts exceeding in amount the value of the movable property, an Order was signed by the Judge directing that the movable and immovable property of the Successions be sold at public auction on the premises, for cash, to pay debts; and pursuant thereto the Sheriff, after publication of legal notices, conducted the sale on the premises on June 2, 1917, and sold and adjudicated the movable and immovable property to "Estillina Guillot, wife of Joseph Vendome Roger." The validity of this sale is the main issue in this case.
The descendants of Estillina Guillot Roger and her husband, Joseph Vendome Roger, and/or their assigns, designated Group A, claim title under the above mentioned sale. The remaining seven children of Mr. and Mrs. Eugene Guillot, their heirs and assigns, designated Group B, attack the validity of the succession proceedings, contending that the sale thereunder was an absolute nullity and that consequently the successions of Mr. and Mrs. Eugene Guillot were never divested of the property, so that all of their heirs are entitled to respective fractional interests, and urge five reasons for the asserted nullity, i. e. (a) the succession proceedings were ex parte and the forced heirs of the decedents were neither notified, cited, nor made parties, and were not called upon to pay the purported debts;
*448 (b) there was no filing of a list of debts, and therefore no way for the Court to determine the necessity for a sale to pay debts; (c) the Administrators failed to wait thirty days from their appointment and thirty days from the taking of inventory before applying for an order to sell, as required by law; (d) the sale was based on debts which were prescribed;[2] and (e) the purchase was made by the wife, Estellina Guillot Roger, for the benefit of the community while both she and her husband were joint administrators of the successions, at a time when the husband did not fall within any of the exceptions set forth in Article 1146 of the Civil Code.[3]
The Trial Judge, in a very able and well considered opinion, we think properly disposed of the irregularities relied on in (a), (b), (c) and (d), holding that they were relative nullities and prescribed against, under the express provisions of Article 3543 of the Revised Civil Code.[4] See Phoenix Building & Homestead Ass'n v. Meraux, 189 La. 819, 180 So. 648; Arceneaux v. Cormier, 175 La. 941, 144 So. 722; cf. Thibodaux v. Barrow, 129 La. 395, 56 So. 339; Hibernia Bank & Trust Co. v. Whitney, 130 La. 817, 58 So. 583; Wright v. Calhoun, 151 La. 998, 92 So. 589; Milburn v. Proctor Trust Co., 5 Cir., 122 F.2d 569, certiorari denied 314 U.S. 698, 62 S.Ct. 479, 86 L.Ed. 559. It is apt to observe that there is no allegation of fraud, and after a perusal of the record we are in accord with the observation of the Trial Judge that there is no evidence of misfeasance except such as might be inferred, and his further remarks that "It seems to us that if the administrators had intended to divest Group B of their interest in the succession property by subterfuge and to that end considered attempting to perpetrate a simulation and a sham by instituting an ex parte proceeding without notice to the interested heirs, it is hardly reasonable to suppose that they would have made provision for a public auction on the premises in the very vicinity in which the alleged unnotified heirs resided. We believe that by the published advertisement, general notice was given to the world, that by the overt act of a sale on the premises, particular notice was intended to be given to friends, neighbors and relatives, and that the administrators may thereby be judged by their deeds. If any inference is to be drawn from the succession record, it is that the record evidences the intention of the administrators to reveal, rather than to conceal, their actions."
*449 We think it appropriate at this point to quote approvingly[5] the philosophy of this Court as announced in the case of Lafitte, Dufilho & Co. v. Godchaux, 35 La. Ann. 1161: "The genius of our law does not favor the claims of those who have long slept on their rights and who, after years of inertia, conveying an assurance of acquiescence in a given state of things, suddenly wake up at the welcome vision of an unexpected advantage and invoke the aid of the courts for relief, under the effect of a newly discovered technical error in some ancient transaction or settlement." 35 La. Ann. at page 1163.
This brings us to the main question presented for our determination on this appeal, i. e., whether the acquisition by "Estillina Guillot, wife of Joseph Vendome Roger," one of the children of Mr. and Mrs. Eugene Guillot, was an absolute nullity in that such acquisition was for the benefit of the community which existed between her and her husband, Joseph Vendome Roger, a co-administrator of the successions who was neither an heir, a legatee, a mortgage creditor nor holder of a vendor's lien on succession property, and therefore the sale must fall under the prohibition of Revised Civil Code Article 1146.[6] In disposing of this phase of the case adversely to Group B, the Trial Judge commented with logic and clarity: "Group B's contention raises the highly technical objection that, since Mrs. Roger's husband had been named co-administrator with his wife, her purchase as an heir, although expressly authorized by C.C. 1146, became tainted with nullity. The fragile nature of the technicality is emphasized by the alternative plea to the effect that if the sale is not a whole nullity, then it is half a nullity. * * * The contention leaves the implication that, if Mr. Roger had not qualified as co-administrator with his wife, Mrs. Roger's acquisition would have been clothed with unquestioned sanctity. There can be no doubt as to Mrs. Roger's right as an heir to purchase succession property at a public sale under the provisions of C.C. 1146. We doubt the impairment of that right only because her acquisition became vested in the community by operation of law. * * * We cannot find any such legislative intent in its meaning;"[7] and held "that the mere incidental circumstance that a husband qualified with his wife as co-administrator of the succession of her parents did not in any manner divest or impair her right to purchase succession property, or taint the purchase with nullity of any character."
The cases relied on by appellantsHarrod v. Norris' Heirs, 11 Mart., O.S., 297; Willis v. Berry, 104 La. 114, 28 So. 888; Dugas v. Gilbeau, 15 La.Ann. 581; Aronstein v. Irvine, 49 La.Ann. 1478, 22 So. 405; Succession of Stanbrough, 37 La.Ann. 275from which certain language has been taken and is relied on as conclusive of the issue here and as showing that in those instances where a partner was executor the Court struck with nullity the entire sale and not merely the interest acquired by the partner, are not apposite or controlling under the facts of this case and need not be separately discussed. The Civil Code declares that "The community of property, created by marriage is not a partnership; it is the effect of a contract governed by *450 rules prescribed for that purpose in this Code." (Article 2807.)
The conclusion we have reached makes it unnecessary for us to consider the suggestion made by counsel for certain of the appellees, in a plea of prescription of thirty years filed here and in answers to the appeal, that we pass on other pleas and defenses urged in the lower court and not passed on by the Trial Judge.
For the reasons assigned, the judgment appealed from is affirmed.[8]
NOTES
[1] The plaintiffs obtained mineral leases from the persons comprising both groups.
[2] The argument here is that the only purported creditor was Joseph Vendome Roger, whose recitation that the successions were indebted to him formed the basis for the sale; yet, as to Eugene Guillot's half of the community and any indebtedness by his estate, since he had died fourteen years prior to the succession proceeding, such claim was prescribed, and an administrator is without power to waive or renounce prescription once it has run in favor of the estate which he administers.
[3] Article 1146 declares that an administrator is prohibited from purchasing, either directly or through a third person, any property entrusted to his administration, unless he be "the surviving partner in the community or ordinary partnership, or an heir or legatee of the deceased or * * * mortgage creditor [of decedent's mortgaged property] or * * * when he has a claim secured by such vendor's lien [on decedent's property so encumbered] * * *."
[4] That Article declares "That any and all informalities of legal procedure connected with or growing out of any sale at public auction of real or personal property made by any sheriff of the parishes of this State, licensed auctioneer, or other persons, authorized by an order of the courts of this State, to sell at public auction, shall be prescribed against by those claiming under such sale after the lapse of two years from the time of making said sale, except where minors or interdicted persons were part owners at the time of making it, and in the event of such part ownership by said minors or interdicted persons, the prescription thereon shall accrue after five years from the date of public adjudication thereof."
[5] For another instance of approval of the same language, see Fried v. Bradley, 219 La. 59, at page 81, 52 So.2d 247, at page 255.
[6] Group B also pleaded in the alternative that if the title was held to be good as to the half belonging to Mr. Estillina Guillot, then title to the half of the community that belonged to the husband, Joseph Vendome Roger, was null.
[7] It has been said that the reason for introducing the principle enunciated in Article 1146 of the Code is obvious, and its wisdom manifest; that it was to prevent men from being led into temptation and so that they might not be placed in a situation where their private interests, and their duties to others were at variancethe law presuming that in such case, the latter would be sacrificed. See Harrod v. Norris' Heirs, 11 Mart.,O.S., 297, 299-300.
[8] One segment of Group A made three demands that were not tried and presented in the Court below, but the right was reserved to them to urge those demands at a later date; as summarized by the Trial Judge, these were (a) "that the claims of Group B, made in bad faith, constitute a slander upon the title of Group A and have damaged Group A in the sum of $25,000;" (b) "that the `pretended claim' of Group B `was made at the instigation of the plaintiffs' (Sun and Humble), who thereby breached their contract with Group A in making an unnecessary and unjustifiable deposit in the registry of the court, and who are liable to Group A for damages in the sum of $25,000;" and (c) "that Group A is entitled to collect 8% per annum interest from the respective due dates of the royalty payments on deposit."
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FILED
NOT FOR PUBLICATION FEB 23 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, Nos. 11-30222
11-30224
Plaintiff - Appellee,
D.C. Nos. 2:10-cr-00156-LRS
v. 2:10-cr-00160-LRS
LUIS ANGEL BOTELLO, a.k.a. Juan MEMORANDUM *
Rodriguez-Jimenez,
Defendant - Appellant.
Appeal from the United States District Court
for the Eastern District of Washington
Lonny R. Suko, District Judge, Presiding
Submitted February 21, 2012 **
Before: FERNANDEZ, McKEOWN, and BYBEE, Circuit Judges.
In these consolidated appeals, Luis Angel Botello appeals from the
63-month sentence imposed following his guilty-plea conviction for being an alien
in the United States after deportation, in violation of 8 U.S.C. § 1326, and from the
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
six-month concurrent sentence imposed following revocation of supervised release.
We have jurisdiction under 28 U.S.C. § 1291, and we affirm
Botello contends his sentences are substantively unreasonable. The within-
Guidelines sentences are substantively reasonable in light of the totality of the
circumstances and the sentencing factors set forth in 18 U.S.C. §§ 3553(a) and
3583(e). See United States v. Carty, 520 F.3d 984, 992-93 (9th Cir. 2008) (en
banc).
AFFIRMED.
2 11-30222
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628 So.2d 862 (1993)
Frank CASSICK
v.
Peggy L. Cassick MORGAN.
AV92000344.
Court of Civil Appeals of Alabama.
September 24, 1993.
*863 W. Gregory Hughes, Mobile, for appellant.
Herndon Inge, Jr. of Inge, McMillan & Coley, Mobile, for appellee.
ROBERTSON, Presiding Judge.
The parties, Peggy L. Cassick and Frank G. Cassick, were divorced by decree of the Circuit Court, Mobile County, Alabama, on January 24, 1989. During the marriage, the husband adopted the wife's two children. This was the second adoption of the children by one of the wife's husbands. Shortly after the finalization of the adoption, the wife filed for divorce. The children were fourteen and eleven, respectively, at the time of the divorce.
Prior to the divorce, the wife signed an agreement relieving her husband of child support payments upon the husband's payment of $3,000. The testimony reflects that the husband paid the $3,000. The divorce decree, however, provided that the husband pay to the wife $240 per month as child support and that he provide the children with health insurance. Subsequent to the divorce, the wife remarried. She and the children moved to Arkansas with her new husband.
In September 1992, the wife filed a motion to modify the child support payments and requested that the husband be ordered to pay for her son's post-minority education. It appears from the testimony that a previous motion to modify had been filed by the wife and denied by the trial court.
On November 16, 1992, the trial court, after an ore tenus proceeding, modified the judgment of divorce and ordered the husband to pay $982 per month to the wife as child support.
The husband's post-judgment motion was denied, and he appeals, contending that the trial court erred in increasing his child support obligation by $742 per month.
Under current law, the provisions of any judgment of child support shall be modified only upon a showing of a material change of circumstances since the entry of the last judgment that is substantial and continuing. Rule 32(A)(2)(i), A.R.J.A.; Moore v. Moore, 575 So.2d 95 (Ala.Civ.App. 1990). The modification of child support will not be disturbed on appeal unless there is an abuse of discretion. Bass v. Bass, 475 So.2d 1196 (Ala.Civ.App.1985).
The wife testified that she spends $1,000 per month on the children, including $300 to $400 per month on clothing and $105 per month for her daughter's orthodontic treatment. However, the record is devoid of any evidence that the children need $300 to $400 *864 worth of clothes each month or that the daughter needs the orthodontic treatment. The wife failed to produce any canceled checks or receipts to substantiate her expenditures of $1,000 per month. Also, there is no evidence in the record that the children's needs have substantially and materially changed since the entry of the last judgment. The wife simply testified that she spent that much money.
Exorbitant spending in itself is not sufficient to prove a substantial change in circumstances; instead, it is the increased needs of the child coupled with the parent's ability to pay. Cox v. Cox, 591 So.2d 90 (Ala.Civ.App.1991). "The most pertinent factor in determining a modification of child support is a material change in the needs, conditions, and circumstances of the children." Whitfield v. Whitfield, 570 So.2d 700, 703 (Ala.Civ.App.1990) (citation omitted). In this case, the record does not indicate that the children's needs or expenses have increased since the entry of the last judgment, or that the wife is unable to meet her share of these costs. Whitfield. In fact, the record indicates that the wife, in addition to her regular employment, is now one-half owner of a growing business operated by her and her present husband. The record reflects that the wife deposits substantial amounts of money each month in her personal checking account in the operation of the business and that one-half of the profits from the business is hers.
The wife failed to present evidence of a material change in the children's needs, that is substantial and continuing, since the entry of the last judgment. We find, therefore, that the trial court's modification of the judgment of child support is unsupported by the evidence and, consequently, constitutes an abuse of discretion.
The trial court's judgment is hereby reversed, and this cause is remanded for an entry of judgment denying the wife's motion to modify.
REVERSED AND REMANDED WITH DIRECTIONS.
YATES, J., concurs.
THIGPEN, J., concurs in result.
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510 So.2d 138 (1987)
Bertram L. SANDERS II
v.
KIRKLAND & COMPANY, et al.
85-467.
Supreme Court of Alabama.
February 20, 1987.
Rehearing Denied June 30, 1987.
Jack E. Held and Charles R. Driggars, of Sirote, Permutt, Friend, Friedman, Held & Apolinsky, Birmingham, for appellant.
James S. Hubbard, and Henry Agee, Annison and Kirby Sevier and David M. Smith, of Maynard, Cooper, Frierson & Gale, Birmingham, for appellees.
HOUSTON, Justice.
This action arises out of a former business relationship between Bertram L. Sanders II and the accounting firm of Kirkland & Company ("Kirkland"), which was an Alabama general partnership. Sanders filed this action against Kirkland and the equity partners of Kirkland ("defendants"). *139 Sanders contends that he was an equity partner in Kirkland, and the issues before the trial court were breach of the partnership agreement by the defendants, wrongful termination of Sanders as a partner, and fraud by defendants in representing to Sanders that he would have a vested interest in the partnership assets.
The trial court dismissed Sanders's jury demand and set the case down for a non-jury hearing in order to
"consider all the evidence presented for and on behalf of the respective parties relative to an accounting and determine the said partnership interest of the Plaintiff in Kirkland & Company, as to extent, nature and amount, owed by Defendants to Plaintiff or owed by Plaintiff to Defendants, as provided in the Alabama Partnership Act, Section 10-8-1, et seq. of the Code of Alabama of 1975." (Emphasis added.)
The trial court thereafter proceeded for six days to hear "all the evidence ... relative to an accounting," and entered a 16-page judgment disposing of all of Sander's claims, except his fraud claim. (Emphasis added.) The "wrongful exclusion" claim was specifically considered as part of the "evidence ... in relation to the accounting" and was found to have "no merit," as the court's judgment of August 2, 1985, explicitly states:
"The Court finds no merit to Plaintiff Sander's asserted claim that he was involuntarily removed as a partner of Kirkland, in or about May, 1982, nor does the Court find that Sanders was either involuntarily removed or wrongfully terminated as a partner from September 26, 1980, to and until August, 1982, when he submitted his resignation ...." (Emphasis added.)
The trial court's judgment concluded by acknowledging that the court had "heard and considered `all issues triable in the accounting,'" and judgment was entered against Sanders on all claims except the fraud count.
The trial court found that Sanders had been "overpaid" by the sum of $246.13 on his voluntary resignation. Accordingly, the trial court held that Sanders owed Kirkland this amount.
Sanders first contends that the court erred to reversal in dismissing his jury demand for the claim based on his allegedly wrongful termination/exclusion from Kirkland.
Rule 38(a), Ala.R.Civ.P., provides:
"(a) The right of trial by jury as declared by the Constitution of Alabama or as given by statute of this State shall be preserved to the parties inviolate."
As the Committee Comments to Rule 38 make clear, "Subdivision (a) is identical with Constitution 1901, § 11, and thus preserves the right to jury trial precisely as it has been known heretofore in Alabama." (Emphasis added.) In Ex parte Collins, 394 So.2d 952 (Ala.1981), this Court made the following statement:
"The Constitution and the Rules of Civil Procedure preserve to all litigants the right of trial by jury as it existed under prior procedure, and the Rules cannot be construed to restrict such right. However, they should not be construed to permit a jury trial on issues which were never triable by jury before the adoption of the Rules, unless such issues are merged with issues which were." (Emphasis added.)
Richey v. Creel, 437 So.2d 554, 555 (Ala. Civ.App.1983).
Accordingly, it is well settled in Alabama that "Rule 38(a), ARCP, simply preserves the historic right to a jury trial where that right existed at the time of the adoption of the Alabama 1901 Constitution." Shelton v. Shelton, 376 So.2d 740, 741 (Ala.Civ.App. 1979); see also Ex parte Jones, 447 So.2d 709, 711 (Ala.1984). The constitutional guaranty of trial by jury does not extend to causes of action "unknown to the common law" or "equitable in nature." Shelton v. Shelton, supra, at 741; Ex parte Jones, supra, at 711; Pugh v. Calloway, 295 Ala. 139, 325 So.2d 135 (1976); City of Mobile v. Gulf Dev. Co., 277 Ala. 431, 171 So.2d 247 (1965).
The law of Alabama has historically and consistently treated any claim of *140 "wrongful exclusion" from a partnership as being a purely equitable claim, for which the exclusive remedy is a non-jury accounting. See Hunter v. Parkman, 254 Ala. 494, 48 So.2d 878 (1950); McDonough v. Saunders, 201 Ala. 321, 78 So. 160 (1917); Reilly v. Woolbert, 196 Ala. 191, 72 So. 10 (1916).
Thus, in Hunter v. Parkman, 254 Ala. at 498, 48 So.2d at 881, this Court expressly noted that "[t]he law is well settled that one partner may not recover in an action against his copartner on account of matters growing out of the firm business, until there has been a settlement and a balance found due him." (Emphasis added.) The Court explained the remedy available to the complaining partner as follows:
"For the breach of a partnership agreement which creates an obligation by one partner which runs to the partnership, his co-partner cannot recover damages except as an incident to the partnership settlement and accounting. Northen v. Tatum, 164 Ala. 368, 51 So. 17 [(1909)]; 40 Am.Jur. 457, section 473; 47 Corpus Juris 806, section 255. But this may be taken into consideration in the accounting on a settlement in equity...."
254 Ala. at 498, 48 So.2d at 882.
Likewise, in McDonough v. Saunders, 201 Ala. 321, 78 So. 160 (1917), which involved an appeal from an equity court concerning the alleged "wrongful exclusion" of a partner in a joint venture, this Court deemed that the equity court was the proper forum for resolving the partnership dispute, including the wrongful exclusion claim. 201 Ala. at 325, 78 So. at 164. Upon review of the record in the equity proceeding, this Court affirmed the chancellor's holding that "the evidence in this case fails to show such grave fault on the part of [complainant] which would authorize a dissolution of the partnership or the expulsion of the [complainant] from further membership or participation in the joint adventure as was attempted by appellants in this case." Id., 201 Ala. at 328, 78 So. at 167. Thus, the case acknowledges that claims for "wrongful exclusion" from a partnership are equitable in nature under Alabama law.
Further, in Reilly v. Woolbert, 196 Ala. 191, 72 So. 10 (1916), which involved a claim that the complainant's partner had "excluded him from participation in the business, and thereafter ... refused to make any settlement with complainant," this Court determined that such a claim was properly to be resolved in equity. Specifically, the Court's opinion states: "This [partnership] relation, under the allegations of the bill, would entitle complainant to an accounting and settlement of the partnership business, as an independent equity, regardless of the nature of the account, whether complicated or simple." 192 Ala. at 193, 72 So. at 11.
Significantly, the settled principle that claims for "wrongful exclusion" from partnership affairs are to be included in an equitable accounting is now expressly codified at § 10-8-47 of the Alabama Code 1975, as follows:
"§ 10-8-47 Right of partner to formal accounting.
"Any partner shall have the right to a formal accounting as to partnership affairs:
"(1) If he is wrongfully excluded from the partnership business or possession of its property by his copartners;" (Emphasis added.)
Pre-1901 Alabama decisions uniformly confirm that Sanders had no standing to demand a jury on any issue arising from the partnership affairs or on any claim for legal damages until an amount had been found due him from his former partners. E.g., Broda v. Greenwald, 66 Ala. 538 (1880); Pope v. Randolph, 13 Ala. 214 (1848). In Broda, this Court said:
"It is settled law, that one partner cannot sue the other at law, on any claim originating in their partnership dealings, unless there has been a settlement of partnership accounts, and an ascertained balance due from one to the other." (Emphasis added.)
66 Ala. at 542.
In its even earlier Pope decision, after reciting the foregoing principle, this Court *141 stated: "This is too well established to need a reference to authorities." 13 Ala. at 220.
Sander's claim for "wrongful exclusion" from Kirkland is one that is historically of a purely equitable nature, for which the exclusive remedy is a non-jury accounting. Adding a claim for damages for mental anguish, emotional distress, humiliation, and mental anxiety to such an equitable claim, unknown at common law, does not create a right to jury trial where none has ever existed. As one court aptly stated in a somewhat analogous context:
"The basically equitable nature of an action ... for an accounting is not changed by the inclusion of a claim for damages. Such a claim only restates the basic equitable action, and in no way creates a right to trial by jury. Indeed it would make no sense that the claim for damages could change an equitable action into one at law. Damages can only be determined after an accounting of whether or not money is owed to or from [the defendant]..."
Bonnell v. Commonwealth Realty Trust, 363 F.Supp. 1392, at 1393 (E.D.Pa.1973).
The trial court found that Sanders was an income partner and not an equity partner, and had no interest in the assets of the partnership. There was credible evidence to support the trial court's findings that there were two types of partners in the partnership (equity and income) and that Sanders was an income partner. Under our standard of review, we assume that the findings of fact by the trial court which heard evidence presented ore tenus are correct and we will not make our own findings of fact unless the appellant can convince us that the trial court's findings of fact are palpably wrong, not supported by any credible evidence, or manifestly unjust. Clardy v. Capital City Asphalt, 477 So.2d 350 (Ala.1985). In this case, the trial court's findings of fact are supported by the evidence, and we are not persuaded that such findings are palpably wrong or manifestly unjust.
Sanders contends that the trial court erred in granting defendants' motion for summary judgment on the fraud count. Count III of Sander's complaint is as follows:
"9. On or about the 26th day of September 1980, Defendants and Plaintiff were negotiating concerning the entry of the Plaintiff into KIRKLAND & COMPANY.
"10. At that time, Defendants represented to the Plaintiff that if he joined as a partner in KIRKLAND & COMPANY, he would have a vested interest in the assets of the partnership.
"11. The representations made by Defendants were false, and Defendants knew that they were false; or, in the alternative, Defendants, without knowledge of the true facts, recklessly misrepresented them, or, the representations were made by mistake with the intention that Plaintiff should rely upon them.
"12. Plaintiff believed the representations and, in reliance upon them, joined with KIRKLAND & COMPANY as a partner.
"13. The association of Plaintiff and Defendants was terminated on or about August 17, 1982, at which time Plaintiff demanded a sum of money which represented his share of the partnership assets. The Defendants failed and refused to account to Plaintiff for the partnership assets and further failed and refused to make payment to Plaintiff." (Emphasis added.)
The trial court found that the alleged misrepresentations made by the defendants to Sanders were made after he became a partner in Kirkland on September 26, 1980, and therefore, could not have been relied upon by Sanders when he "joined with KIRKLAND & COMPANY as a partner," as alleged in his complaint.
The standard of review applicable to an order granting summary judgment for a defendant is well established. See Rule 56(c), Ala.R.Civ.P. In this case, summary judgment would be proper if it clearly appears that there is no evidence of reliance, which is an essential element in a cause of action for fraud. If there is any evidence tending to establish justifiable reliance, *142 then summary judgment would be inappropriate, since there was some evidence of each of the other elements of fraud. In determining whether there is evidence to support each elementto raise a genuine question of material fact as to whether that element exists, Rule 56(c)this Court must review the record in a light most favorable to the plaintiff and resolve all reasonable doubts against the defendants. Harbison v. Albertville National Bank, 495 So.2d 1084 (Ala.1986).
Sanders's claim is simply that he relied upon the representations by "join[ing] with Kirkland & Company as a partner." As the trial court explained, it is undisputed that the alleged misrepresentations took place after Sanders was made a partner; thus, he could not possibly have relied upon the misrepresentations in making his decision to join "with Kirkland & Company as a partner." In support of that finding, the Court accepted plaintiff's own deposition testimony:
"Q All right. Mr. Sanders, you have stated in Count one of this Complaint, of your Complaint in this lawsuit, that you had, quote, a vested interest in the inventory of work in process and the accounts receivable, close quote, of this partnership, the partnership of Kirkland and Company. You had that vested interest as of the time your professional relationship was terminated on August 17, 1982.
"Is it your contention that you were promised this vested interest or that you were represented, it was represented to you that you would have such a vested interest, was this ever promised to you or told to you before you ever became a partner, income or otherwise, in the firm.
"A Before, specifically, no, sir.
"Q When Mr. Smith interviewed you at the University of Alabama or during your entire three and a half years as an employee, or at the time you walked in here, up until the time you walked in here on September 26th, 1980, was it ever represented to you by anyone that you would have such a vested interest?
"A Prior to that date, no, sir.
"Q Okay. Mr. Sanders, is it your contention that you were promised this vested interest in the inventory of work in process and accounts receivable after you became a partner in the firm?
"A Yes, sir."
It is fundamental to an action for fraud that the plaintiff must have relied to his detriment on the alleged misrepresentation. In the absence of proof of reliance, a plaintiff's fraud claim must fail as a matter of law. E.g., Taylor v. Moorman Mfg. Co., 475 So.2d 1187 (Ala.1985); Webb v. Renfrow, 453 So.2d 724 (Ala.1984); Davis Bluff Land & Timber Co. v. Cooper, 223 Ala. 137, 134 So. 639 (1931).
In the instant case, the undisputed facts establish that the action allegedly taken by Sanders in reliance upon the representationsbecoming a partner in Kirklandtook place before the representations ever occurred. Based upon these facts, the trial court properly concluded that the fraud claim must fail as a matter of law, and summary judgment was properly granted. We need not discuss whether the fraud action was time barred.
AFFIRMED.
TORBERT, C.J., and MADDOX, ALMON and BEATTY, JJ., concur.
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 22, 2008
No. 07-10976
Summary Calendar Charles R. Fulbruge III
Clerk
RICHARD A WALTERS
Plaintiff-Appellant
v.
UNITED STATES OF AMERICA; GEORGE VENTURA, Revenue Agent; V
JOSEPH, Revenue Officer; ROBERT LAPISKA, Revenue Officer; JOHN SNOW,
SECRETARY, DEPARTMENT OF TREASURY; COMMISSIONER OF
INTERNAL REVENUE
Defendants-Appellees
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:06-CV-427
Before STEWART, OWEN, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Richard A. Walters appeals the district court’s dismissal of his complaint
which challenged certain tax penalties assessed against him. We affirm.
I. Background
Walters worked for Tax Strategies, Inc., in Leheigh Acres, Florida,
between January 1998 and December 31, 2000. During this time, the IRS
*
Under 5TH CIR. R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in that rule.
No. 07-10976
alleges that Walters promoted or sold abusive tax shelters and other abusive tax
schemes in violation of federal law. In a prior action, the IRS and Walters
entered into a Stipulated Judgment and Permanent Injunction which enjoined
Walters from, among other things, continuing to organize and sell these
fraudulent tax arrangements.1 The IRS subsequently investigated and
determined that, prior to entry of the injunction, Walters had sold forty-five
prohibited plans to his clients.
The IRS assessed a penalty of $45,000 against Walters. This penalty
consisted of $1,000 for each allegedly improper tax arrangement that Walters
sold. The IRS sent Walters a notice of the penalty and a demand for payment
on January 2, 2006. After receiving the notice, Walters sent $100 to the IRS and
filed an administrative claim for refund. After waiting six months and receiving
no response from the IRS, Walters filed this action seeking injunctive and
declaratory relief, a refund of his $100 payment, and unspecified damages. The
Defendants moved to dismiss Walters’s claims. The district court granted the
motion and Walters timely appealed.
II. Analysis
The Motion to Dismiss was granted pursuant to Federal Rule of Civil
Procedure 12(b)(1) and 12(b)(6). We review the dismissal de novo. Brown v.
Nationsbank Corp., 188 F.3d 579, 585 (5th Cir. 1999).
Congress has adopted procedures a taxpayer must follow to challenge
penalties such as these. The statute provides that within thirty days of receiving
notice of the penalty, the taxpayer must pay at least 15% of the amount assessed
and also file a claim seeking a refund of the amounts paid. 26 U.S.C. §
6703(c)(1). This partial payment operates to stay the collection of the remaining
amounts assessed until the dispute is resolved. Id. If the IRS denies the
taxpayer’s claim, the taxpayer can bring suit in district court within thirty days
1
United States v. Anderson, et al., No. 2:04-cv-400 (M.D. Fla. March 7, 2005).
2
No. 07-10976
of the date of denial. 26 U.S.C. § 6703(c)(2). The taxpayer can also bring suit if
the IRS fails to take any action on his validly filed claim for six months. Id.
In this case Walters paid $100 and filed a claim for refund within the
required thirty days.2 Of course, this $100 payment is less than 15% of both the
entire $45,000 assessment ($6,750) as well as each $1,000 penalty ($150).3
Walters argues that his $100 “partial payment” was sufficient under Section
6703(c)(2) to submit a claim. He argues that when the IRS failed to respond to
his claim for six months, he properly filed this suit.
As an initial matter, this court has not held that the “partial payment”
language of Section 6703(c)(2) allows a taxpayer to make a payment of less than
15% before challenging the assessment. See Nielsen v. United States, 976 F.2d
951 (5th Cir. 1992) (“The statutory framework provides that after the taxpayer
pays the 15% and the IRS denies a refund” the taxpayer may proceed in district
court). The “any partial payment” language of Section 6703(c)(2) must be read
in conjunction with Section 6703(c)(1), which expressly requires that 15% of the
penalty must be paid. See Noske v. United States, 911 F.2d 133, 136 (8th Cir.
1990) (rejecting argument that “any partial payment” could mean less than
15%). Walters’s failure to follow the administrative procedure set out by
Congress to challenge the IRS assessment – paying 15% of the assessment and
2
On appeal Walters attempts to present additional evidence that he paid more than
$100. Specifically, Walters attempts to attribute amounts subsequently collected by the
Government to satisfy the required 15%. Of course, absent extraordinary circumstances, we
do not consider evidence on appeal that was not first presented to the district court. Benefit
Recovery, Inc. v. Donelson, 521 F.3d 326, 326 (5th Cir. 2008). Even were we to consider
Walters’s evidence, there is no indication that the amounts withheld by the Government were
withheld within thirty days after Walters was given notice of the assessment as required by
Section 6703(c)(1).
3
Walters alleges that each $1,000 assessment is divisible, and he was only required
to pay 15% of one assessment (or $150) to challenge the assessment. While it is unclear
whether each sale of an abusive tax scheme constitutes a separate activity for purposes of
filing a claim, we do not have to decide the issue in this case. Walters paid only $100 – or 10%
of one assessment. Thus, even if the assessments are considered divisible, Walters’s payment
falls short of the amount necessary to properly challenge the assessment.
3
No. 07-10976
seeking a refund – means this court does not have jurisdiction to consider his
claim. Gustin v. United States, 876 F.2d 485, 488 (5th Cir. 1989) (taxpayer must
follow procedures and file a valid claim for a refund or federal court is deprived
of subject matter jurisdiction). Therefore, the district court correctly held that
it lacked subject matter jurisdiction over Walters’s challenge to the $45,000 in
penalties assessed by the IRS.
Walters also challenges Section 6703's requirement that he pay 15% of the
assessment as a prerequisite to challenging the validity of the assessment.
Walters claims that he should be entitled to a hearing to challenge the
assessment before having to pay any amount to the IRS. Walters alleges that
by requiring prepayment the statute violates his constitutional right to due
process. This claim is without merit. The IRS’s assessment and collection
procedures do not violate a taxpayer’s due process rights so long as the taxpayer
is provided post-collection review. Baddour, Inc. v. United States, 802 F.2d 801,
807 (5th Cir. 1986) (collecting cases). Therefore, the district court properly
dismissed Walters’s challenge to the constitutionality of Section 6703.
Apart from challenging the $45,000 assessment and the constitutionality
of the prepayment requirement, Walters also seeks injunctive and declaratory
relief. Walters argues that by obtaining the prior injunction, the IRS is now
barred – either by res judicata or collateral estoppel – from assessing penalties
for conduct that occurred prior to entry of the injunction.
With regard to his claim for declaratory relief, the Declaratory Judgment
Act specifically excludes from its scope actions “with respect to Federal taxes.”
28 U.S.C. 2201(a). Therefore, the district court correctly held it did not have
jurisdiction to consider Walters’s claim for declaratory relief, and it was properly
dismissed. McCabe v. Alexander, 526 F.2d 963, 965 (5th Cir. 1976).
Similarly, with regard to Walters’s claim for injunctive relief, Congress has
enacted the Anti-Injunction Act which denies federal courts jurisdiction over
suits to enjoin assessment or collection of a tax. 26 U.S.C. § 7421(a). The
4
No. 07-10976
Supreme Court has recognized a narrow exception to this prohibition. The
exception applies where the taxpayer can demonstrate that even “under the
most liberal view of the facts and law, the government cannot win,” and the
taxpayer demonstrates that he “will suffer irreparable injury for which no legal
remedy is adequate.” Smith v. Rich, 667 F.2d 1228, 1231-32 (5th Cir. 1982).
Walters incorrectly argues that his claim fits within this narrow exception.
Walters’s claim that either collateral estoppel or res judicata bars the IRS from
assessing or collecting any penalty against him (and therefore the Government
“cannot win”) is without merit. The purpose of the prior injunction was to
ensure that Walters did not engage in prohibited conduct in the future.
Walters’s liability for past conduct was neither litigated nor decided in that
action. Res judicata and collateral estoppel are inapplicable in this context. See
United States v. Shanbaum, 10 F.3d 305, 310-11 (5th Cir. 1994). Therefore, the
district court properly held that it did not have subject matter jurisdiction to
consider Walters’s claims for injunctive relief. Zernial v. United States, 714 F.2d
431, 433 (5th Cir. 1983).
Finally, Walters asserts that several individuals involved in the
assessment and attempted collection of the penalties violated his constitutional
rights. The district court correctly concluded that the allegations against these
individuals are for acts performed in their official capacities, and are therefore
properly claims against the United States. Turner v. Houma Mun. Fire and
Police Civil Serv. Bd., 229 F.3d 478, 483 (5th Cir. 2000). Therefore, Walters
failed to state a claim against these individuals and the claims were properly
dismissed. We have already concluded that Walters does not have a valid claim
against the United States. Therefore, the district court properly dismissed the
claims against all Defendants.
AFFIRMED.
5
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 14-746V
Filed: July 8, 2016
* * * * * * * * * * * * * * * * UNPUBLISHED
CORY DANIELSON, *
* Special Master Hamilton-Fieldman
Petitioner, *
* Attorneys’ Fees and Costs;
v. * Reasonable Amount Requested to
* which Respondent Does Not Object.
SECRETARY OF HEALTH *
AND HUMAN SERVICES, *
*
Respondent. *
* * * * * * * * * * * * * * * *
Lawrence Disparti, Disparti Law Group, PA, Holiday, FL, for Petitioner.
Lara Englund, United States Department of Justice, Washington, D.C., for Respondent.
DECISION 1
On August 19, 2014, Cory Danielson (“Petitioner”) filed a petition pursuant to the
National Vaccine Injury Compensation Program. 2 42 U.S.C. §§ 300aa-1 to -34 (2012).
Petitioner alleged that human papillomavirus (“HPV”) vaccines administered to him on August
30, 2012 and October 31, 2012 caused him to suffer from pancreatitis. On February 17, 2016,
the undersigned issued a decision awarding compensation to Petitioner.
On June 16, 2016, Petitioner filed a timely motion for attorneys’ fees and costs
(“Motion”). 3 Petitioner requests compensation for attorneys’ and paralegals’ fees and costs in
1
Because this decision contains a reasoned explanation for the undersigned’s action in this case, the
undersigned intends to post this ruling on the website of the United States Court of Federal Claims, in
accordance with the E-Government Act of 2002, Pub. L. No. 107-347, § 205, 116 Stat. 2899, 2913
(codified as amended at 44 U.S.C. § 3501 note (2012)). As provided by Vaccine Rule 18(b), each party
has 14 days within which to request redaction “of any information furnished by that party: (1) that is a
trade secret or commercial or financial in substance and is privileged or confidential; or (2) that includes
medical files or similar files, the disclosure of which would constitute a clearly unwarranted invasion of
privacy.” Vaccine Rule 18(b).
2
The National Vaccine Injury Compensation Program is set forth in Part 2 of the National Childhood
Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755, codified as amended, 42 U.S.C. §§
300aa-1 to -34 (2012) (Vaccine Act or the Act). All citations in this decision to individual sections of the
Vaccine Act are to 42 U.S.C.A. § 300aa.
3
Pursuant to Vaccine Rule 13(a), any request for attorneys’ and costs must be filed no later than 180 days
after the entry of judgment.
1
the amount of $22,356.71. Petitioner and her counsel have verified that Petitioner did not
personally incur any costs in pursuit of his claim. See General Order #9 Statement, filed July 5,
2016.
On June 28, 2016, Respondent filed a Response to the Motion in which she states that she
“does not object to the overall amount sought, as it is not an unreasonable amount to have
incurred for proceedings in this case to date.”
The Vaccine Act permits an award of reasonable attorneys’ fees and costs. 42 U.S.C.
§ 300aa-15(e). The undersigned finds that this petition was brought in good faith and that there
existed a reasonable basis for the claim. Therefore, an award for fees and costs is appropriate,
pursuant to 42 U.S.C. § 300aa-15(b) and (e)(1). Further, the proposed amount seems reasonable
and appropriate. Accordingly, the undersigned hereby awards the amount of $22,356.71, in
the form of a check made payable jointly to Petitioner and Petitioner’s counsel, Lawrence
Disparti, of the Disparti Law Group, PA.
In the absence of a motion for review filed pursuant to RCFC Appendix B, the clerk of
the court shall enter judgment in accordance herewith. 4
IT IS SO ORDERED.
s/ Lisa Hamilton-Fieldman
Lisa Hamilton-Fieldman
Special Master
4
Entry of judgment can be expedited by each party’s filing of a notice renouncing the right to seek
review. Vaccine Rule 11(a).
2
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990 F.2d 1186
1993-1 Trade Cases P 70,248
DeLONG EQUIPMENT COMPANY, Plaintiff-Appellant, Cross-Appellee,v.WASHINGTON MILLS ELECTRO MINERALS CORP., f/k/a WashingtonMills Abrasive Co., Washington Mills CeramicCorp., John T. Williams and PeterWilliams,Defendants-Appellees,Cross-Appellants.
No. 92-8049.
United States Court of Appeals,Eleventh Circuit.
May 17, 1993.
William E. Sumner, David A. Webster, Sumner & Hewes, Atlanta, GA, for plaintiff-appellant, cross-appellee.
Paul Webb, Jr., Philip S. Coe, Webb & Daniel, Atlanta, GA, for defendants-appellees, cross-appellants.
Appeal from the United States District Court for the Northern District of Georgia.
Before KRAVITCH, Circuit Judge, GODBOLD and OAKES*, Senior Circuit Judges.
OAKES, Senior Circuit Judge:
1
The critical question presented by this case involves a conspiracy between a manufacturer and a favored distributor. The object of the conspiracy was to raise wholesale prices to other distributors, including the plaintiff, on products to be sold to one large customer. It is of some significance that the wholesale price, as raised, was higher than prevailing retail prices. The antitrust law question is whether this conspiracy was a device to force an increase in the resale price, or a vertical agreement to fix the minimum resale price in violation of § 1 of the Sherman Anti-Trust Act, 15 U.S.C. § 1 (1988) (the "Act"). Resale price maintenance agreements are, of course, per se illegal restraints of trade within § 1 of the Act. Absent such per se illegality here, defendants concededly prevail.
2
This is the third time this court has addressed this case. The second time here, on appeal from a grant of summary judgment for the defendants, this court held that evidence proving such a conspiracy would support a finding of antitrust injury within the line of cases commencing with Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 31 S.Ct. 376, 55 L.Ed. 502 (1911), extending through Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977), to and including Business Elecs. Corp. v. Sharp Elects. Corp., 485 U.S. 717, 108 S.Ct. 1515, 99 L.Ed.2d 808 (1988). DeLong Equip. Co. v. Washington Mills Abrasive Co., 887 F.2d 1499 (11th Cir.1989), rehearing and rehearing en banc denied, 896 F.2d 560, cert. denied, 494 U.S. 1081, 110 S.Ct. 1813, 108 L.Ed.2d 943 (1990) (DeLong II ).1 In Delong II, this court indicated that the essence of the alleged conspiracy between the manufacturer and the favored distributor was to inflate the price of the manufacturer's standard product by labeling it "special" and "charging Pratt [the Pratt & Whitney Aircraft Division of United Technologies Corp., a significant customer] a significantly higher price than Washington Mill's list price for [the] identical [product]." 887 F.2d at 1509. Following this court's ruling in DeLong II, a jury trial resulted in a verdict for the plaintiff distributor against the defendant manufacturer, the favored distributor defendant having settled with the plaintiff after DeLong I. We are now faced with an appeal from the district court's denial of motions for judgment notwithstanding the verdict on the plaintiff-distributor's Sherman Act price-fixing, Robertson-Patman Act price-discrimination and common-law fraud verdicts; with a cross-appeal from the district court's grant of a new trial on Sherman Act damages and Robinson-Patman Act damages; and with an appeal from the awarding to the manufacturer defendant of pre-judgment interest on a counterclaim for outstanding debts.
3
Because the key questions in the case involve consideration of issues addressed in this court's last opinion, this appeal thus requires consideration of the ancient but venerable doctrine of "the law of the case." In addition, the case raises questions of sufficiency of proof, injury in fact, and conspiracy. Problems of interlocutory review are not involved, however, since this court granted petitions for review of all of the issues following district court certification, pursuant to 28 U.S.C. § 1292(b) (1988).
I. BACKGROUND
A. Facts:
4
While the background facts were well set forth in DeLong II, in the interests of easier understanding, we will recount them here. The plaintiff distributor is DeLong Equipment Company ("DeLong"), a Georgia corporation wholly owned by Harold DeLong. DeLong distributes equipment and supplies used to polish and deburr metal parts in industrial manufacturing processes. The critical product in this process, called "media," consists of abrasive materials which are placed in vibratory machinery with the metal parts to be polished and deburred. Media can consist of natural products, such as sand without the backing paper used in sandpaper. The media involved in this case, however, known as "preformed ceramic media," is made from a blend of clays, sands and polishing agents, extruded through metal molds and cut into different shapes, such as cylinders, stars, rectangles or triangles, after which it is baked and dried. The media is packed by the manufacturer and shipped either to distributors such as DeLong or directly to customers. Distributors, as pointed out in DeLong II, not only provide regular and prompt delivery of media and related supplies, but also consult with the end user, helping it select the appropriate equipment, media, power, speed and time to bring the user's product to the correct state of polish.
5
The manufacturer defendants-appellants and cross-appellees are Washington Mills Electro Minerals Corporation, formerly known as Washington Mills Abrasive Company, located in North Grafton, Massachusetts and in the business since 1868, and its wholly-owned subsidiary Washington Mills Ceramic Corporation, located in Lake Wales, Florida. They are joined in their appeal by the two individual defendants-appellants, officer/owners John T. Williams and Peter Williams (who are not related). For simplicity, we will refer to the Washington Mills Electro Minerals Corp., its officers and its subsidiary collectively as "Washington Mills."
6
The other primary actor in this case, the BCS Company, Inc. ("BCS"), settled with DeLong before DeLong II. BCS, located in Thompson, Connecticut, is a distributor of media with a business quite similar to DeLong's. Both BCS and DeLong have distributed Washington Mills' products since the early 1980s, and BCS was Washington Mills' primary distributor in the northeastern United States during all times relevant to this litigation. Neither DeLong nor BCS itself manufactures media, but both distribute media manufactured by other companies, including but not limited to Washington Mills. Like other Washington Mills distributors, generally speaking, DeLong and BCS purchased media for resale at a wholesale discount rate of 25% off the retail list price. Since no Washington Mills distributors had exclusive territories or franchise areas, the distributors competed for end-user accounts. They received standard price lists showing the size, shape, composition and price per pound of each kind of "stock" media in the Washington Mills manufacturing inventory. The price list also indicated that customers could request "special" media if they met minimum volume requirements and paid for a new die if one was needed to produce the media.
7
The specific, key customer involved was the Pratt & Whitney Aircraft Division of United Technologies Corporation ("Pratt"). Pratt, which manufactures aircraft engines and uses ceramic preformed media to polish its jet engine blades, is not a party to this action but, before this case, was one of Washington Mills' largest end-user customers. As one might suspect, Pratt's engineering department tests and approves the use of specific materials in its manufacturing processes and issues specifications used by the purchasing department to solicit bids for any given products necessary; these specifications appear on Pratt product material control dockets ("PMCs"). With exceptions not relevant here, the Pratt purchasing department may only purchase pre-approved items specified on the PMCs from pre-approved dealers and the materials delivered must have the PMC numbers stamped on the box. The media at issue here, manufactured by Washington Mills for Pratt and known as "special," were approved by Pratt after testing and designated on the appropriate PMCs as "P & W 5,000" (PMC 3175), "P & W 6,000" (PMC 3178) and "P & W 7,000" (PMC 3179). The testing and approval of the Washington Mills products was done by Pratt engineers in East Hartford, Connecticut, in consultation with William and Robert Biebel of BCS. James Neal, a Pratt engineer and a friend of the Biebels, obtained the issuance of the PMCs for the "special" Washington Mills media furnished by BCS. BCS was designated in the Pratt PMC as "manufacturer" and the product was labeled accordingly both by BCS itself and by Washington Mills on empty boxes for the products to be supplied to Pratt.
8
There was ample proof at trial to support the allegations in DeLong's complaint that the "special" media involved in this case was actually generic, that is, media that Washington Mills regularly produced and carried in stock, and that this "special" media, sold to the specific customer around whom this case revolves, did not differ in composition from the generic media stocked by Washington Mills. Thus, the evidence is essentially conclusive that it cost Washington Mills no more to produce the "special" media involved in this case than it did to produce its regular line set forth in its standard price list. Pratt, in other words, was duped.
9
At the time Pratt issued its PMC for the purchase of "BCS-manufactured" special media, Washington Mills was selling the very same media generically to BCS for .495 dollars per pound. This price was based on Washington Mills's standard distributors' discount of 25% off its retail price of .66 dollars per pound. BCS's resale price to Pratt on its initial sales from February through October 5, 1983, however, was .97 dollars per pound, giving BCS a profit of .475, or 96%. Meanwhile, Pratt was both designing a new jet engine and planning on building a new production facility; as of the spring of 1983 it did build such a facility in Columbus, Georgia, not far from DeLong's place of business. Harold DeLong became aware of Pratt's plans and decided to pursue the account as an approved vendor. He began by asking the Washington Mills sales representative, Peter Ford, what type of media was being provided to the Pratt East Hartford plant, but was told only that BCS was "handling" the Pratt account. Harold DeLong was not able to learn from Ford what specific products Pratt required.
10
Nevertheless, DeLong solicited business from Pratt as early as June, 1983. Evidently when word of this got back to Connecticut, the Washington Mills sales representative, Ford, asked Harold DeLong to meet in Atlanta with Robert Biebel of BCS in August, 1983. Biebel indicated to Harold DeLong that he was willing to work with DeLong in a joint venture and that there was "plenty of money in it" for both DeLong and BCS. Harold DeLong declined the offer, reasoning that he did not need BCS's help. After the Atlanta meeting and perhaps after Harold DeLong expressed his suspicions that the Pratt "special" media was really generic, stock Washington Mills media, BCS and Washington Mills agreed on the price-fixing scheme brought into question here. The scheme was that Washington Mills would raise the wholesale price paid by BCS for media to be resold to Pratt from .495 dollars to .85 dollars per pound, but Washington Mills would pay back to BCS the difference. This was to be and was in fact done by sending disguised payments through Wood & Thompson, a foreign corporation in Nassau, the Bahamas, created by BCS shortly after BCS learned that Pratt was locating its new jet engine facility in Georgia. The payback checks and internal vouchers did not identify BCS and were issued for fictitious invoices made payable to Wood & Thompson and mailed directly to the Bahamas. The evidence was that the offshore company was established in order to keep such payments "private," and Washington Mills did not report them to the I.R.S. on a Form 1099. Not surprisingly, perhaps, the payback checks are called "kickbacks" by DeLong and "commissions" by Washington Mills.
11
At an August, 1983 meeting at Pratt's East Hartford, Connecticut plant between representatives of Washington Mills and Pratt, the Washington Mills personnel present gave Pratt the Washington Mills designation of "P & W special 5,000" in connection with the Pratt PMC 3175 and "P & W special 6,000 and 7,000" to correspond to the two Pratt PMCs, 3178 and 3179. As previously indicated, the "P & W special 5,000" was a stock item available at .495 per pound to all Washington Mills distributors, and the "P & W special 6,000 and 7,000" also were identical to media listed in the stock price list at .495 per pound for distributors (at the 25% discount from the retail list price of .66 per pound). On September 1, 1983, the day after BCS filled a purchase order for 10,000 pounds of PMC 3175 destined for the Columbus facility, various Pratt representatives visited DeLong to survey DeLong in response to its previous request for formal supplier qualification. In that meeting, they provided DeLong with a list of the products that Pratt needed, setting forth BCS computer code numbers. DeLong understood from this meeting that it was qualified as a Pratt vendor. On October 6, 1983, Pratt issued a blanket purchase order number 4929748 for 86,400 pounds of PMC 3175 for use at the Columbus plant. DeLong could not bid on this order because Washington Mills had not as yet supplied it with the product identification for Pratt media, with the result that BCS made the sale. Between October 7, 1983 and October 17, 1984 BCS was to fill this entire order at .91 dollars per pound, although at first the order was fulfilled from earlier purchases of media and before the kickback arrangement went into effect.
12
By letter of November 4, 1983, Washington Mills finally provided DeLong with Pratt media designations, but informed DeLong that the wholesale price to DeLong would be .85 dollars per pound. As stated, until that time Washington Mills had charged BCS only .495 dollars per pound for identical media. DeLong immediately called and questioned the "special" designation and the 85-cent price, stating that the media samples appeared to be standard Washington Mills stock media which could be ordered at .495 dollars per pound from the price list. When the Washington Mills representative insisted that the media were special, DeLong replied that "everyone had better be paying the same price for the 'specials'." Indeed, on January 18, 1984, in BCS's first purchase of PMC 3175 thereafter, BCS was charged 85 cents per pound for 12,500 lb. of a Pratt special. Pursuant to the payback agreement, however, Washington Mills paid .355 dollars per pound to BCS through Wood & Thompson, making the BCS price for the special media exactly .495 dollars per pound, the very same price that BCS had paid for the media prior to the Washington Mills November 4, 1983 letter to DeLong. Both Robert Biebel of BCS and the treasurer of Washington Mills testified that the payments to Wood & Thompson were calculated to maintain BCS's pre-November, 1983 price.
13
In the spring of 1984, the Washington Mills representative with whom DeLong had dealt left the company and two new salesmen, Robert Baldauf and Hans Van der Sande, began dealing with DeLong. According to them, DeLong raised the issue of "special designation of Pratt media every time he had the opportunity." DeLong also conducted independent laboratory tests, concluding that the media were identical. Nevertheless, Washington Mills continued to charge DeLong the .85 price and, while DeLong sold some small amounts to the Pratt plant at Columbus, Pratt's requirements for this plant were satisfied largely by deliveries from BCS under the prior October, 1983 order. There was no reason for Pratt to stop ordering media from BCS, though it could have canceled that order under its terms, since it was receiving the product at a price of 91 cents a pound, which DeLong could not meet, given its cost from Washington Mills of 85 cents a pound F.O.B. Lake Wales, Florida. Consequently, DeLong sold a total of only 6,150 pounds of media to Pratt during 1984.
14
Van de Sande testified that after the last deliveries were made by BCS under the October, 1983 order, Biebel, Van der Sande and Baldauf visited Pratt in Columbus, Georgia (almost simultaneously visiting DeLong in Atlanta), to lay the groundwork for using Washington Mills trucks and Lake Wales warehousing to deliver media directly to Pratt at the rate of 750,000 to 1 million pounds per year. According to Biebel, BCS felt secure for three years, since that was the time it ordinarily took Pratt to get a material approved, "unless DeLong d[id] not play the game." According to Van der Sande, this meant that DeLong might "upset the apple cart." As a result of this visit, Pratt's orders were placed directly with Washington Mills as of November 12, 1984, with special retail prices charged for what was actually generic media, and on these direct sales BCS continued to receive kickbacks, though in varying amounts. DeLong, smarting, perhaps, continued to raise concerns regarding the "special" designation and inflated price. Washington Mills terminated DeLong as a distributor in August, 1985, and while it introduced evidence to the effect that the termination was because DeLong had made incorrect payments and DeLong personnel had been abusive, the jury found these claims to be pretextual.
B. Procedural History:
15
DeLong brought this action in February, 1986, alleging violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2 (1988); § 2 of the Clayton Act as amended by § 1 of the Robinson-Patman Act, 15 U.S.C. § 13(a) (1988); § 3 of the Clayton Act, 15 U.S.C. § 14, and various violations of Georgia law, including breach of contract, tortious interference with business relationships and fraud. DeLong alleged, inter alia, that it was terminated for failure to participate in the scheme between Washington Mills and BCS to fix the price of media sold to Pratt, and Washington Mills asserted as defenses that the termination was in response to payment delays and abusive DeLong employees. This court reversed the dismissal of Robert Biebel and BCS for lack of personal jurisdiction (affirming as to William Biebel) in DeLong I, 840 F.2d 843 (11th Cir.1988). Thereafter, the district court granted the defendants' motion for summary judgment on all counts except some aspects of the Robinson-Patman Act count, but certified the grant under Fed.R.Civ.P. 54(b) to the Court of Appeals which, in Delong II, reversed. 887 F.2d 1499 (11th Cir.1989). After that reversal, the district court vacated its directed verdict in a trial limited to the Robinson-Patman Act count which had been held pending the appeal in DeLong II, granted a new trial as to the claims there tried, and consolidated all counts for a second jury trial which began July 30, 1990 and was concluded after five weeks with 19 witnesses and thousands of pages of exhibits. The district court directed a verdict for Washington Mills on a counterclaim for outstanding bills and submitted DeLong's Sherman Act, Robinson-Patman Act, and fraud claims to the jury. The jury returned a verdict for DeLong on August 21, 1990 on the Sherman Act count in the sum of $2,033,295, on the Robinson-Patman Act count in the sum of $50,216.25 and on the common law count for $117,824, including $100,000 in punitive damages. The district court entered its judgment on September 21, 1990, trebling the antitrust damages to $6,099,885 on the Sherman Act count and $150,648.75 on the Robinson-Patman Act count. On October 1, 1990, DeLong moved to alter or amend the judgment on the counterclaim to eliminate pre-judgment interest, and on October 5, 1990, Washington Mills moved alternatively for judgment notwithstanding the verdict or a new trial as to DeLong's judgment. On April 1, 1991, the district court entered an order deferring ruling on the post-judgment motions, held a hearing on May 2, 1991, and entered an order on September 30, 1991 denying the Washington Mills motions for judgment notwithstanding the verdict on all counts,2 and denying the motion for a new trial as to liability on the antitrust claims and liability and damages on the common-law fraud count. The district court, however, granted a new trial as to the measure of damages under both the Sherman Act and Robinson-Patman Act counts, and denied DeLong's motion for judgment notwithstanding the verdict as to the interest awarded on Washington Mills' counterclaim. The trial court granted cross motions to certify for interlocutory review pursuant to 28 U.S.C. § 1292(b) on November 20, 1991, and this court granted cross petitions for such review.
C. Standard of Review:
16
This court reviews de novo a denial of judgment notwithstanding the verdict, see Watts v. Great Atl. & Pac. Tea Co., 842 F.2d 307, 309-10 (11th Cir.1988), including in an antitrust case the question of antitrust injury which is one component of whether or not the plaintiff has standing, a question of law. See Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1448 (11th Cir.1991). The grant of the motion, as here, for a new trial is generally reviewed under an abuse of discretion standard, though when it is on evidentiary grounds the verdict must be against the great weight of the evidence to sustain the grant. E.g., Rixey v. West Paces Ferry Hosp., Inc., 916 F.2d 608, 611-12 (11th Cir.1990); Jackson v. Magnolia Brokerage Co., 742 F.2d 1305, 1307 (11th Cir.1984).
17
Review is of course de novo where the trial court's order involves an error of law. See, e.g., Allstate Ins. Co. v. Springer, 269 F.2d 805, 808 (6th Cir.1959), cert. denied, 361 U.S. 932, 80 S.Ct. 370, 4 L.Ed.2d 353 (1960). We recognize that bearing on the above are the points that the grant of a new trial on an evidentiary basis involves a possible intrusion upon the function of a jury, Hewitt v. B.F. Goodrich Co., 732 F.2d 1554, 1556 (11th Cir.1984); Spurlin v. General Motors Corp., 528 F.2d 612, 619-20 (5th Cir.1976), and that damages are an issue as to which considerable discretion is committed to the jury, Quality Foods, Inc. v. U.S. Fire Ins. Co., 715 F.2d 539, 542 (11th Cir.1983); Hobart Bros. Co. v. Malcolm T. Gilliland, Inc., 471 F.2d 894, 903 (5th Cir.), cert. denied, 412 U.S. 923, 93 S.Ct. 2736, 37 L.Ed.2d 150 (1973) (antitrust damages); see Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123-24, 89 S.Ct. 1562, 1576-77, 23 L.Ed.2d 129 (1969) (antitrust). At the same time, we recognize that both Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), involving a horizontal restraint on trade, and Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984), involving a vertical restraint, limit the permissible range of inferences of conspiracy that may be drawn in the antitrust context of restraints of trade.
II. DISCUSSION
18
We will discuss the issues in the case much as the parties have in their briefs, viz: by separating the issues appealed by Washington Mills resulting from the denial of its motions for judgment notwithstanding the verdict and the issues on the cross-appeal by DeLong resulting from the grant of the Washington Mills motions for a new trial in respect to damages, on both the Sherman Act and the Robinson-Patman Act counts.
A. Proof of Conspiracy:
19
Washington Mills claims that there was insufficient evidence at trial to support a finding of conspiracy, and that the inferences of concerted action between BCS and Washington Mills were negated at trial by the testimony of plaintiff's own witnesses, Washington Mills having called Robert Biebel, Baldauf and Van der Sande. We note that Baldauf, a former southeastern sales representative for Washington Mills, and Van der Sande, Washington Mills' former national sales manager, both left Washington Mills to form a competing manufacturer, Ceratech. Baldauf and Van der Sande testified that they had not known of any effort to fix prices of media or acted in furtherance of a conspiracy to fix those prices. Robert Biebel testified that he had nothing to do with the 85 cents per pound charged BCS or DeLong for the Pratt "special" media by Washington Mills, or had any agreement with anybody at Washington Mills as to the price at which BCS would sell media, whether before or after DeLong was terminated, or the price at which Washington Mills would sell media to DeLong, or with anyone as to termination of DeLong as a distributor. Washington Mills contends that against this "direct and positive evidence" DeLong offered only a string of inferences that an agreement on price could have been reached, and that this evidence is "so highly ambiguous" as not to support a finding of conspiracy according to the terms of Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 763, 104 S.Ct. 1464, 1470, 79 L.Ed.2d 775 (1984) and Riverview Invs., Inc. v. Ottawa Community Improvement Corp., 899 F.2d 474 (6th Cir.), cert. denied, 498 U.S. 855, 111 S.Ct. 151, 112 L.Ed.2d 117 (1990). We agree with DeLong, however, that there was substantial evidence to support the finding of conspiracy. There was evidence that the so-called "special" media for Pratt was identical to stock media, and that the increased price charged by Washington Mills for the product to Pratt was not justified by any cost differential. Indeed, two of the "special" media, known as P & W 6,000 and P & W 7,000, were clearly identified as stock media on Washington Mills' price list. As for P & W 5,000, while it was not listed on a stock price list, it was available at all relevant times at the stock price on orders for more than 10,000 lbs. or at the stock price plus a nominal charge for producing a die on smaller orders; as to it, the actual added cost was minimal, and it was composed of the same materials as the other generic media. Moreover, Washington Mills sold all three types of "Pratt" media to other customers as well as to BCS, at the stock price.
20
In addition, it was the Washington Mills sales representative, Peter Ford, who arranged the meeting between Robert Biebel of BCS and Harold DeLong in August, 1983, at which meeting Biebel proposed a "joint venture," saying "there is plenty of money in it" for everyone. It was after this meeting that Washington Mills joined in the arrangement for special pricing of $.85 per pound to BCS, with a "kickback" or "commission" to BCS through BCS's offshore affiliate, Wood & Thompson, reducing the effective price to the original $.495 per pound.
21
At about the same time that Ford met with DeLong, he met with Pratt in August, 1983 and gave it the new Washington Mills special media designations for the stock media sold to distributors at .495 per pound, retailing for $.66 per pound. BCS quoted Pratt a price of $.91 per pound in its successful October, 1983 order but Ford ignored DeLong's September 1, 1983 request for confirmation of the identity and price of these "specials" and delayed giving DeLong a Washington Mills quotation long enough to prevent DeLong from bidding on the October, 1983 order. When Ford did finally write to DeLong on November 4, 1983, calling the Pratt media "specials" and quoting the distributor price as $.85 per pound, BCS did not receive a price announcement letter. As DeLong points out, the jury could have concluded properly that BCS was not informed because it was part of the conspiracy which already knew the price arrangements, including the kickback arrangement, which would enable it to make up the difference between the regular price for generic media and the .85 quote to DeLong.
22
A year later, in October, 1984, Van der Sande and Baldauf came into the picture, at the time BCS was scheduled to make the last delivery to Pratt under the October, 1983 order. By this time, Washington Mills and BCS had a new scheme to support the Pratt price. They urged Pratt to purchase media directly from the manufacturer, bypassing DeLong, with Washington Mills agreeing to pay kickbacks to BCS even on the direct sales. Indeed, Van der Sande's report of that meeting stated that Robert Biebel had said he had several good friends at Pratt who from time to time took trips on his boat to the Bahamas, which friendships gave him an edge on the competition. Van der Sande thought that Pratt would likely become Washington Mills' largest media customer, buying $750,000-$1,000,000 worth of media per year. Van der Sande reported to Washington that "Bob Biebel feels we are secure for at least three years unless DeLong does not play the game." Van der Sande did not mention his meeting with the Pratt people in Georgia the day before he visited DeLong, but he did say that DeLong was "not very happy" with BCS and Pratt.
23
Perhaps the critical fact in terms of a conspiracy is that Washington Mills rebated to BCS the total difference, right to the half penny, between its new 85 cent price and the 49.5 cent stock price. This totally destroyed any argument that increased costs justified a higher price. If it was supposed to reflect some greater care or concern on the part of BCS toward Pratt, then DeLong should have been allowed to accept the same degree of responsibility at the same price. Instead, Delong, when it continued to complain about the pricing and the use of stock media under "special" labels to Pratt, was terminated on what the jury found were the pretextual reasons of being behind in payments to Washington Mills and abusive to Washington Mills personnel, allegations that were identified by the Court of Appeals in DeLong II as "[g]enuine issues of material fact...." 887 F.2d at 1513.
24
The long and the short of it is that the jury could properly conclude that Washington Mills and BCS conspired to fix the price of Washington Mills media both to DeLong and to Pratt under the fraudulent cover that the generic media was "special," and by the fraudulent means of kickbacks by way of "commissions" to BCS's offshore shell corporation.
25
B. Legal Arguments on the Sherman Antitrust Act Claims:
26
Of considerably more stature are appellant's three principal legal arguments, namely, that DeLong failed to establish "antitrust injury"; that DeLong failed to establish "injury in fact" (because numerous other sources of supply were available to DeLong); and that DeLong failed to establish an agreement regarding resale price, as required by Business Electronics, on the basis that resale price maintenance is a required element of a vertical price-fixing claim, and that there was no evidence at trial of a fixed "pad" to be added to BCS's resale price or any other agreement or restriction on the price to be charged by BCS.
27
Each of these legal arguments runs headlong into the doctrine of "law of the case." As well put in another antitrust act case decided by this court's predecessor, the Fifth Circuit, a decision of the Court of Appeals at an earlier stage of the same case represents the law of the case not only as to matters "decided explicitly" but also as to those "decided by necessary implication." Terrell v. Household Goods Carriers' Bureau, 494 F.2d 16, 19 (5th Cir.1974), cert. dismissed, 419 U.S. 987, 95 S.Ct. 246, 42 L.Ed.2d 260 (1974). The district court must follow the appellate decision as to these issues on remand, id., and generally speaking the appellate court must do so in future rulings in the case as well, id. at 19-20. Recognizing that the doctrine "is not an inexorable command that rigidly binds the court to its former decisions, but rather is an expression of good sense and wise judicial practice," id. at 19, the general rule is that "an appellate court's decision of issues must be followed in all subsequent trial or intermediate appellate proceedings in the same case" except when there are "the most cogent of reasons," such as a change in controlling authority, new evidence or the need to avoid manifest injustice. Id. at 19-20. See also, e.g., Virgin Atl. Airways, Ltd. v. National Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 67, 121 L.Ed.2d 34 (1992). As the Supreme Court has said, the "[l]aw of the case directs a court's discretion, it does not limit the tribunal's power." Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 1391, 75 L.Ed.2d 318 (1983). See also 18 Charles A. Wright, Arthur R. Miller and Edward H. Cooper, Federal Practice and Procedure § 4478 at 790 (1981).
28
Under the law of the case doctrine, DeLong II basically decided the Sherman Act liability claims against Washington Mills on the matters of law argued here, and there has been no intervening change in the law since DeLong II was decided. See DeLong II, 887 F.2d 1499. The DeLong II court addressed these issues in the context of a grant of summary judgment to the defendants on the theory that the conspiracy alleged and the evidence adduced to establish it did not describe a vertical restraint on trade. The DeLong II court held that the alleged conspiracy to restrain competition here was "to fix prices of media sold to Pratt by designating ordinary media as 'special' media and selling it at an artificially inflated price to Pratt." 887 F.2d at 1505. The DeLong II court ruled that such a conspiracy, if proven, was a vertical restraint within the meaning of Business Electronics Corp., 485 U.S. at 730 & n. 4, 108 S.Ct. at 1522 & n. 4, DeLong II, 887 F.2d at 1505-06, and furthermore that it was a vertical restraint that "include[d] some agreement on price or price levels." Id. at 1506 (quoting Business Elecs, 485 U.S. at 736, 108 S.Ct. at 1525). After pointing out that this case involves termination of DeLong as a distributor of Washington Mills "in furtherance of" the vertical price restraint conspiracy, DeLong II, 887 F.2d at 1505, the court in DeLong II, citing Monsanto v. Spray-Rite Service Corp., 465 U.S. at 760-61, 104 S.Ct. at 1469, distinctly held that the restraints alleged there and proven on remand were not "non-price in nature" as the district court had held, 887 F.2d at 1506-07, but, rather, constituted "a vertical price conspiracy," id. at 1507, within the meaning of Business Electronics, "to artificially inflate or 'pad' the price." 887 F.2d at 1507 & n. 11. The DeLong II court went on to hold that the conspiracy alleged was an objectively and economically reasonable one within the meaning of Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538, and that there was not only evidence of concerted action by inference, but a tendency of the evidence "to exclude the inference of independent action." DeLong II, 887 F.2d at 1508-09 (quoting Helicopter Support Sys., Inc. v. Hughes Helicopter, Inc., 818 F.2d 1530, 1534 & n. 4 (11th Cir.1987)). Reciting the evidence of conspiracy above mentioned, the DeLong II court went on to demonstrate how the evidence supported DeLong's assertion that it was an obstacle to the continuation of the scheme between Washington Mills and BCS to "pad" the Pratt price, and that DeLong was terminated to remove that obstacle, 887 F.2d at 1512-15, adding that DeLong had "adduced evidence which tends to exclude the possibility that Washington Mills was acting independently when it terminated DeLong." 887 F.2d at 1514.
29
Thus, the law of the case doctrine is applicable and we see no reason to hold otherwise. While DeLong II did not say that the evidence presented necessarily established the vertical price conspiracy, it did say that the evidence of such a conspiracy sufficed to defeat summary judgment. On remand, a jury presented with evidence at least as strong as that recounted in the DeLong II opinion concluded that such a conspiracy had been established.
30
Nevertheless, we realize that the doctrine of the law of the case "permits a change of position if it appears that the court's original ruling was erroneous." DiLaura v. Power Auth. of the State of N.Y., 982 F.2d 73, 77 (2d Cir.1992), quoting Petitions of the Kinsman Transit Co., 388 F.2d 821, 825 n. 9 (2d Cir.1968). See also Arizona v. California, 460 U.S. 605, 618 n. 8, 103 S.Ct. 1382, 1391 n. 8 (1983). Recognizing the great deference that is owing to the unanimous determination of the previous panel on summary judgment, "reached in a case that [was] already well advanced and designed to control further proceedings," 18 Wright, Miller & Cooper § 4478 at 796, we nevertheless in the interests of certitude reexamine on the merits the points of law raised.
31
1. Injury in Fact.
32
Perhaps least susceptible to law of the case argumentation is Washington Mills' point that DeLong did not establish injury in fact because it was undisputed that numerous other sources of media were and are available to it; thus, the defendants argue that there is no causal connection between the termination and DeLong's claimed lost profits because there were "alternative comparable substitute[s] for the desired merchandise." Elder-Beerman Stores Corp. v. Federated Dep't Stores, Inc., 459 F.2d 138, 148 (6th Cir.1972). The basis for this argument is an admission by DeLong's expert, Dr. Seaman, that it was a "possibility" that DeLong could capture all of Pratt's business, selling media furnished by other manufacturers DeLong "[could] get approved." That condition--that DeLong could get other media approved--was explicit in the question put to Dr. Seaman.3 As we have noted, however, Pratt, presumably concerned with the extraordinarily high standards applicable to jet aircraft engine propellers, had careful procedures for approving products to which the Washington Mills media already had been subjected. It would not automatically approve any preformed ceramic abrasive media, made by any manufacturer. The verdict indicates that the jury rejected the "possibility" that DeLong could compete effectively by simply getting Pratt to approve alternative products.
33
Washington Mills' more significant argument is that DeLong failed to establish antitrust injury, that is, injury "of the type the antitrust laws were intended to prevent and that flows from that which makes the defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977). In other words, as later put in Atlantic Richfield Co. v. USA Petroleum Corp., 495 U.S. 328, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990), even where the conduct complained of is illegal per se, a plaintiff must show that it is "adversely affected by an anti-competitive aspect of the defendant's conduct." Id. at 339, 110 S.Ct. at 1891 (re claims under § 4 of Clayton Act). See also id. at 339 n. 8, 110 S.Ct. at 1890 n. 8 (quoting Phillip P. Areeda and Herbert Hovenkamp, Antitrust Law p 340.3b at 411 (1989 supp.); Areeda and Hovenkamp p 340.3b at 470 (1991 supp.). Washington Mills also refers to Todorov v. D.C.H. Healthcare Authority, 921 F.2d 1438 (11th Cir.1991), for the proposition that determining antitrust standing "involves an analysis of prudential considerations aimed at preserving the effective enforcement of the antitrust laws." Id. at 1448. Todorov recognizes that a showing of antitrust injury, while necessary, is not always sufficient to establish standing. In short, these cases involve plaintiffs who protested their not being allowed to participate in an anti-competitive arrangement, or their loss of a monopolistic position.
34
However, DeLong's injury was a loss of opportunity to compete. DeLong made no further sales of preformed ceramic media to Pratt after its termination. DeLong sought to obtain the list price for purposes of its charges to Pratt, doing what it could to reveal the padded price, and, hence, it can be said that DeLong was willing to subject itself to the competitive market for Washington Mills media and was not in the quest for "super-competitive" profits. Washington Mills, with a better product, offered better-than-competitive prices for its stock media.
35
Todorov, which incidentally cites DeLong II with approval on the means of establishing conspiracy, 921 F.2d at 1456, is not to the contrary. The plaintiff in that case relied upon a monopolistic profit theory to support recovery; unlike Dr. Todorov, DeLong was not interested in forestalling competition and maintaining an inflated price, but in obtaining the stock price at which he could make a profit that was usual in the business with the basic markup. In short, nothing in this case indicates that DeLong sought to benefit from the Washington Mills-BCS anti-competitive conduct or to obtain super-competitive prices. DeLong's contentions properly gave it standing on the basis that Washington Mills, at BCS's instigation and with BCS's assistance, unfairly took advantage of its short-term position as the only approved source of media by artificially inflating the wholesale price and thereby extracting super-competitive profits which it shared with BCS by payment of "commissions" or "kickbacks"; that it blocked competition among distributors of its generic media in the market for one of its largest end-customers; and that it terminated DeLong as a Washington Mills distributor when DeLong threatened not to "play the game." Thus, DeLong has sustained antitrust injury by loss of its Washington Mills distributorship and consequent loss of sales and profits. Because Washington Mills media had certain competitive advantages over alternative media, DeLong has not suffered damage simply from its own failure to compete in an open market with identical media made by other manufacturers. DeLong was not allowed to participate in the competitive market for Washington Mills media because it refused to go along with the Washington Mills/BCS price-fixing scheme.
36
But Washington Mills goes a step farther in arguing that DeLong's claimed injury boils down to the contention that, absent Washington Mills overcharging, Pratt would simply have continued to purchase Washington Mills products, without examining alternative sources of supply. On this basis, it is argued that DeLong's injury results from increased competition, which is by definition not an antitrust injury. Washington Mills and BCS, however, had seen "a window of opportunity," according to the testimony of Washington Mills President and controlling shareholder John Williams, during which they could charge non-market prices without regard to competition. Given BCS's approval and Pratt's purchasing practices, the conspirators had the power to exclude competition and maintain high prices over a longer haul--Biebel was quoted as saying "we are secure for at least three years unless DeLong does not play the game"--so long as DeLong cooperated. True, Pratt has switched to another brand of media, and a witness for DeLong suggested that DeLong could have won that contract had it bid competitively. But DeLong was at a disadvantage in bidding for the Pratt business since it could not offer Washington Mills media. The jury could have decided that DeLong lost the share of the competitive market which it would have had if it had it been able to offer Washington Mills media in the future. No quarrel is had by Washington Mills with the court's repeated instructions to the jury that only losses of business which would have been retained in a competitive market were actionable.
37
2. Failure to show a conspiracy over resale prices.
38
Washington Mills argues, as best we fathom, that Business Electronics made it abundantly clear that the only vertical restraints deemed to be per se illegal under the Sherman Act are agreements relating to resale price, and that the relevant price in the vertical context is "agreement on the price or price levels to be charged by the remaining dealer." Business Elecs. Corp., 485 U.S. at 726, 108 S.Ct. at 1521. The alleged agreement here, the argument runs, was not to fix the retail price, but to fix the wholesale price of media sold to DeLong, or at best to Pratt. Since there was no showing here of any agreement between Washington Mills and BCS as to the price at which the latter would resell to Pratt, the argument continues, there is no per se illegality.
39
This argument meets the law of the case doctrine head-on. As the DeLong II court recognized, all that is required is proof of a fixing of retail price "levels"; this is all that Business Electronics addresses, referring to "a further agreement on the price or price levels to be charged by the remaining dealer." Id., 485 U.S. at 726, 108 S.Ct. at 1521 (emphasis added). While there was no requirement of adding a "fixed pad" to the price to Pratt, there is no question but what Washington Mills and BCS voluntarily agreed to pad the Pratt price. It will be recalled that Biebel of BCS suggested that BCS and DeLong handle the Georgia Pratt business together, assuring DeLong that there was "plenty of money in it for both of us." When DeLong refused to "play the game," Washington Mills raised the price to DeLong to 85 cents and schemed with BCS so as facially to raise the BCS price to the same amount, while surreptitiously rebating the difference between the 85 cents and the 49.5 cent list price for the same stock media. By fixing the wholesale price level at 85 cents, DeLong or any other distributor would have been required to sell to Pratt at the wholesale price plus expenses and market profits, so that what would result would be the equivalent of resale price maintenance. Price-fixing at the wholesale level, as testified to by a DeLong expert economist, was the mechanism by which the retail price was maintained. The agreement in this case, then, was that future sales by anyone--Washington Mills, BCS, or a duped distributor such as DeLong--would be at the premium price.
40
In general, of course, the fixing of wholesale prices poses no antitrust problem. See 8 Phillip P. Areeda, Antitrust Law p 1627 at 316 (1988) ("otherwise, every wholesale price would be illegal--an obviously senseless result"). However, as Areeda notes, complex wholesale price formulae may be the means by which resale price fixing is accomplished, where the formula "so var[ies] the wholesale price in accord with each dealer's resale price as to be the full or substantial functional equivalent of resale price-fixing agreements." Id. at 317. See also id. p 1627d at 319, et seq. As an example of such a functional equivalent retail price fix, Areeda cites Newberry v. Washington Post Co., 438 F.Supp. 470 (D.D.C.1977), in which a manufacturer raised the wholesale price to a particular dealer by the amount by which the actual retail price exceeded the manufacturer's suggested resale price, thus effectively preventing the dealer from charging more; there, it was significant that the increase was applicable only to one dealer. Id. p 1627 at 320-21. Here, to be sure, the wholesale price was not set in response to a dealer's price reduction or increase, but, rather, so as to retain the sweetheart arrangement between the manufacturer and the favored dealer BCS; when DeLong would not comply with the scheme, his dealership was terminated, and, as we read Areeda, he would find this "a vertical price-fixing agreement." Id. p 1627 at 321.
41
To be sure, Areeda recently criticized DeLong II as having "adopted an unduly broad concept of what constitutes resale price maintenance." Areeda and Hovenkamp p 1622' at 1049 (Supp.1991). The supplement's analysis of the DeLong II case in this respect is not up to that well-known treatise's customary high standards, however. It refers to the fact that the plaintiff was "allegedly terminated because it frequently called the attention of customers [sic] and others to this fraudulent scheme," a misstatement of fact. The analysis suggests that the defendant (Washington Mills) might be guilty "merely of successful product differentiation," a far cry from the facts of this case where there was considerable evidence of fraud; or of Robinson-Patman violations "(if the high-priced customer competes with low-price customers)," id., surely not the case here. The supplement then says "[b]ut the supposition of the supplier and the actual charge of higher prices for supposedly premium products do not constitute an agreement setting a resale price...." Id. We do not know to which "supposition" the quotation refers, nor do we know how this squares with the analysis in the main volume of wholesale price schemes which operate as the functional equivalent of resale price-fixing. Certainly an agreement is required to present antitrust problems, but here we have one: an agreement between Washington Mills and BCS to inflate all distributors' end price of products destined for one large customer by eliminating price competition at the dealer level. The Areeda supplement describes the supplier and distributor's agreement to divide the excess profits from their fraud-tainted sales as an agreement with "some" of the attributes of a resale price maintenance agreement, but treats the BCS-Washington Mills deal as "no more than the distributor's reward for participating in the fraudulent scheme." Id. It was not only a reward, however, but an integral part of the very scheme to inflate prices charged by both dealers, and thus a boon for eliminating distributor competition. While it may generally be true, as Areeda argues both in the supplement and in the main volumes, that the supplier would be better off if the distributor charged less than the agreed-on price, because then it would make even more fraudulent sales, the fact is that in this case the supplier's temporary monopoly position, achieved by fraud and by Pratt's careful approval practices for choosing media, allowed it to reap the benefits as well. This may have been short-sighted, in light of the fact that Pratt now uses another brand of media, but nonetheless Washington Mills evidently chose to combine with one of its dealers to eliminate price competition in the market for media sales to Pratt. We believe that the Areeda supplement analysis overlooks the functional equivalence argument made in the main volume and, as such, does not carry the day with us.
42
3. Argument that failure of proof of Sherman Act damages mandated a judgment notwithstanding the verdict, not merely a new trial on damages.
43
The defendants further argue that while the trial court correctly found that the verdict awarding lost profits was based entirely on unsupported assumptions and must be set aside, the appropriate relief should have been the grant of judgment notwithstanding the verdict. Cf. Chrysler Credit Corp. v. J. Truett Payne Co., Inc., 670 F.2d 575, 582 (5th Cir.), cert. denied 459 U.S. 908, 103 S.Ct. 212, 74 L.Ed.2d 169 (1982) (defendant entitled to directed verdict on Robinson-Patman Act claims because "[s]elf-serving and unsupported assumptions cannot sustain a calculation of going concern value. The burden of putting forth substantial evidence is not satisfied by mere speculation and guess work."). However, as we note in the discussion of the new trial motion, DeLong provided substantial evidence of the damages resulting from its loss of the distributorship and consequent loss of sales and profits, based on evidence of its past performance in the marketplace and not simply on "speculation and guess work." As the Supreme Court has noted, antitrust damages of this sort are difficult to prove, and "it does not ' "come with very good grace" ' for the wrongdoer to insist upon specific and certain proof of the injury which it has itself inflicted." J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 566-67, 101 S.Ct. 1923, 1929, 68 L.Ed.2d 442 (1981) (quoting Hetzel v. Baltimore & Ohio R. Co., 169 U.S. 26, 39, 18 S.Ct. 255, 260, 42 L.Ed. 648 (1898) (in turn quoting United States Trust Co. v. O'Brien, 143 N.Y. 284, 289, 38 N.E. 266 (1894)).
44
C. Legal Arguments on the Robinson-Patman Act claim:
45
The district court's denial of judgment notwithstanding the verdict on the Robinson-Patman Act claims is unassailable. Section 1 of the Robinson-Patman Act, which of course amends and appears as section 2 of the Clayton Act, 15 U.S.C. § 13 (1988), makes it unlawful for a seller engaged in commerce to discriminate in price between different buyers. This case involves Washington Mills' charging BCS $.495 per pound for the same media it sold to DeLong for $.85 per pound, thereby permitting BCS to sell to Pratt for $.91, below DeLong's retail price of $.97. On the surface, this is discrimination in price. It is not suggested that the statutory defenses of meeting competition or due allowance for differences in cost are available here, and the judicially-created "availability defense" as stated, e.g., in Shreve Equipment, Inc. v. Clay Equipment Corp., 650 F.2d 101, 105 (6th Cir.), cert. denied, 454 U.S. 897, 102 S.Ct. 397, 70 L.Ed.2d 213 (1981), is foreclosed by the law of the case under DeLong II, 887 F.2d at 1516-17. The only argument seriously advanced here--and to state it makes it appear to border on the ridiculous--is that DeLong and BCS were not in functional or geographic competition with one another, see, e.g., Parrish v. Cox, 586 F.2d 9, 11 (6th Cir.1978) (competition must be in same geographical market); M.C. Manufacturing Co., Inc. v. Texas Foundries, Inc., 517 F.2d 1059, 1068 n. 20 (5th Cir.1975), cert. denied, 424 U.S. 968, 96 S.Ct. 1466, 47 L.Ed.2d 736 (1976). However, there is no doubt but that both BCS and DeLong were after the same Pratt dollar and, while BCS was primarily a New England distributor and DeLong a southeastern one, both were obviously in head-to-head competition for the Pratt Columbus, Georgia expenditures for jet propeller polishing media, and at corresponding or overlapping time periods. Both were competitors during the startup period for Pratt's Columbus plant beginning in 1983. Deliveries to BCS for fulfilling the Pratt Georgia orders were initially made to a warehouse in Manchester, Connecticut and transported to Columbus periodically for a year's period during which DeLong, which had begun soliciting business in June of 1983 from Pratt, made only minimal sales to Pratt's relatively nearby new plant. BCS sales to Pratt thus directly competed with potential sales by DeLong. Cf. Hartley & Parker, Inc. v. Florida Beverage Corp., 307 F.2d 916, 921 (5th Cir.1962) (competition could be established if plaintiff showed "that it had a substantial stock on hand ... and that in selling that stock it was in present and active competition with [the defendant]."). Moreover, at least by September 1, 1983, DeLong had been approved as a vendor by Pratt and the subsequent releases of sales under the earlier October contract made by BCS were thus directly competitive with any DeLong sales. True, BCS had no local Georgia warehouse to meet Pratt's 24-hour delivery requirements, but by virtue of its sweetheart price arrangements with Washington Mills it was enabled both to foreclose DeLong from competing in Georgia for a year and to weaken DeLong's long-term position. While there must be two sales made by the same seller to at least two different purchasers at two different prices, Pierce v. Commercial Warehouse, Div. of Thompson Automotive Warehouse, Inc., 876 F.2d 86, 87 (11th Cir.1989) cert. denied, 493 U.S. 1045, 110 S.Ct. 841, 107 L.Ed.2d 836 (1990), there is no requirement that the two sales be made at precisely the same time or place. It is sufficient if the complaining party demonstrates some sort of real competitive injury. Chrysler Credit Corp. v. J. Truett Payne Co., 670 F.2d at 581-82; M.C. Mfg. Co., 517 F.2d at 1065-68. Washington Mills' motion for judgment notwithstanding the verdict on the Robinson-Patman Act claim was properly denied.
46
Washington Mills also argues that there is no proof of recoverable damages under the Robinson-Patman Act since the jury awarded the exact amount of "commissions" or kickbacks received by BCS, $50,216.25, as damages under the Robinson-Patman Act claim. While this matter will be discussed further in connection with the motion granting a new trial, Washington Mills argues that whatever benefits accrued to BCS did not establish any injury to DeLong. However, this argument conveniently overlooks the fact that DeLong was qualified for approval as a Pratt vendor when the first purchase order let out for bid in late 1983, the October contract, went to BCS because BCS was given the lower $.495 per pound price by Washington Mills and, hence, was able to quote to Pratt a $.91 per pound price while DeLong was unable even to obtain from Washington Mills the necessary product identification for Pratt media.
47
D. Motion for Judgment Notwithstanding the Verdict on the Common-Law Fraud Claims:
48
Washington Mills argues that there can be no recovery on the common-law fraud claim of deceptive labeling of special media because DeLong's "admitted knowledge of the falsity of the representations negates any finding of reasonable reliance." This argument was addressed in DeLong II, 887 F.2d at 1519-20 and, while the law of the case is therefore a complete answer to this argument, the fact is that in reversing the district court's prior dismissal of this claim for lack of justifiable reliance, the DeLong II court specifically pointed out that where a plaintiff repeatedly confronts a defendant with the apparent falsity of its representations, and the defendant repeatedly confirms its original statement, asserting special knowledge, reliance is justified. See Georgia-Carolina Brick & Tile Co. v. Brown, 153 Ga.App. 747, 755, 266 S.E.2d 531, 539 (1980). Washington Mills argues that at trial Harold DeLong did not testify that he was deceived by the special label or that he relied on Washington Mills' alleged "superior knowledge," but, rather, said that he never believed Washington Mills "from day one." But DeLong's inward lack of belief in Washington Mills' fraudulent assertions did not demonstrate itself in any external manifestation other than continued questioning, only to be met by continued misrepresentation. We see no need for any further showing of reliance.
49
Washington Mills points out that the fraud was the sale by Washington Mills of essentially stock media (for which DeLong would normally have been charged $.495 per pound), deceptively labeled as "P & W special" and bearing a premium price of 85 cents. It then goes on to say that, multiplying this extra $.355 per pound by the pounds DeLong actually purchased and resold to Pratt, the total amount comes to $17,824, which, together with $100,000 in punitive damages, was the exact amount awarded by the jury. We find no fault with this judgment, since it appears to be an appropriate award, given a finding of liability.
50
E. Washington Mills' appeal of the denial of its motion for a new trial on liability and DeLong's appeal on the grant of a new trial on antitrust damages.
51
Washington Mills appeals, in connection with its argument that a new trial should have been awarded on liability, alleged errors in the district court's jury charges. First, on the Sherman Act claim, Washington Mills argues that the district court failed to charge that the jury must find some agreement to fix resale, not merely wholesale, prices; second, on the Robinson-Patman Act claim, that the court failed to charge that recoverable damages must reflect actual loss, if any, to the plaintiff, not just the benefit to the favored customer; and third, on the fraud claim, that the district court erred by charging that the plaintiff could recover the amount of the difference between the price actually charged for so-called P & W specials and the price that otherwise would have prevailed had the material been sold as generic. Each of these points is subsumed either in the arguments as to liability above or in the arguments as to damages below, and will not be dealt with further here.
52
DeLong appeals, first, the setting aside of the Sherman Act damage award of $2,033,295 for lost profits, before trebling. Before reaching that verdict, the jury was charged, essentially, to discount Pratt's usage of preformed ceramic abrasive media over the foreseeable future in order to arrive at DeLong's share of that market had DeLong not been terminated as a dealer. The jury verdict was based on the general factual evidence relating to DeLong's past and likely continued success as a dealer, favorable evidence of which was produced by DeLong; Pratt's needs at the Columbus plant; DeLong's willingness to meet price competition and special delivery requirements; DeLong's reputation for technical know-how, testing and delivery capacity, and willingness to work with customers; and DeLong's work history of long-term dealings with Pratt and its other customers. Evidence was adduced to show past loss profits including the amount of Pratt's media usage to the date of trial and its purchase prices. Bud Henry, Pratt's chief media buyer, testified as to Pratt's likely demand for media for 25 years after Pratt's achieving full capacity at its Columbus plant. Scott Thurman, a certified public accountant, provided expert testimony for DeLong in respect to lost profits during Pratt's startup period through its reaching of full capacity in 1994, but concentrating on the computation of factors for inflation and discount to present value. Dr. Bruce Seaman, an economist and professor at Georgia State University, offered alternative projections of lost profits from 1994 forward to 2019, the life of the Columbus plant, and testified to the assumptions underlying the five damage alternatives he presented. The defendants cross-examined the witnesses as to their assumptions, but offered no expert testimony of their own.
53
The district court, in setting aside the Sherman Act damages verdict, indicated that it was doing so because the expert projections were based upon the key assumption that "every single pound of Pratt and Whitney's projected media usage to the year 2019 would be Washington Mills media and that every pound of it would be sold by plaintiff." DeLong Equip. Co. v. Washington Mills Electro Minerals Corp., No. 1:86-cv-275-RLV, slip op. at 3 (N.D.Ga. Sept. 30, 1991) (order vacating judgment and, inter alia, granting motion for new trial on antitrust damages) ("DeLong Order "). This interpretation of the expert testimony, while apparently suggested by Washington Mills' post-judgment brief, does not comport with the testimony. Thurman's testimony that DeLong had suffered a loss of $694,743 in lost sales from 1985 to 1994 started from a base calculation of all sales to the Columbus plant by all manufacturers and distributors, but adjusted profits by assuming a discount of 10% in price, which, as the jury was correctly informed, is the functional and mathematical equivalent of assuming that a significant portion of the Columbus media business would go to other distributors or manufacturers. Thurman's assumption of a discount of sales price by 10% to only 90% of list, amounts to a loss of a third or more of the profit on each individual sale--the substantial equivalent of losing the same proportion of sales. The evidence supports the Thurman calculations, and we find no error that would justify setting aside that portion of the verdict. To be sure, Thurman also offered one estimate of the damages for the entire projection period, through the year 2019, which utilized the constant assumption of this price reduction, and it was apparently on the basis of this assumption that the trial court was led astray. Thurman's calculation produced a figure almost identical to one of Dr. Seaman's five alternative damage scenarios, the one on which the jury settled. However, again, Dr. Seaman presented the jury with five scenarios in which DeLong achieved different degrees of success in the market for the Pratt media business, and the assumptions behind these were based in evidence and subject to cross-examination.
54
The trial court, in its review of the evidence completed more than a year after the verdict, made certain additional factual assumptions that were simply not the case. These include the following:
55
First, Thurman did not assume that all media sold to Pratt would be Washington Mills media, except in a pricing sense, that is to say, in his own words he "identified products from Washington Mills' price lists" and used the corresponding prices from those lists to arrive at his own list price assumptions. His method of arriving at sales volume did not attribute all sales to Washington Mills.
56
Second, the trial court questioned whether Pratt would continue to buy through middlemen as opposed to going directly to the manufacturer. True, the media purchaser for Pratt, Bud Henry, testified that Pratt had a "goal" of reducing prices by buying directly, but he did not suggest that all sales categorically would be made directly or that Pratt would ignore the advantages of going through distributors where they outweighed the advantages of direct sales. Pratt did and does in fact use distributors, since servicing capacity and timely delivery were and presumably are of value to the company, and at the time of trial Pratt was buying the bulk of its media through another distributor, not directly. There was ample evidence to indicate that special services were provided by distributors. One could just as well suppose that Pratt could make its own media. Henry himself concluded that there was no reason that DeLong could not have continued indefinitely as one of Pratt's suppliers.
57
Third, as we have noted, Dr. Seaman examined the case for the lost future profits for 1994-2019 by addressing five alternative models. Despite Washington Mills' and the trial court's claims, he did assume that DeLong was not the only distributor and Washington Mills not the only manufacturer. While he assumed that in the early stages Washington Mills would have had the inside track, he also assumed that DeLong would have "made an adjustment" to be "better positioned to maintain the Pratt accounts." He thus chose different levels of competition and different responses to that competition to make his projections. His case one, not in issue here, was a mathematical extrapolation of "maximum damages." This case was based on the assumption that the trial court mistakenly thought all expert testimony rested upon--"that every single pound of Pratt & Whitney's projected media usage to the year 2019 would be Washington Mills media and that every pound of it would be sold by DeLong." DeLong Order, slip op. at 3. Case one assumed no retail price discount and no lost sales volume, and projected damages of $5,659,618.
58
Dr. Seaman's case two adjusted for increased competition and assumed--as had Mr. Thurman in his projections--a 10% retail price discount to protect sales volume, which produced a damage figure of $3,371,865. His case three adjusted for increased competition by assuming that DeLong would continue charging the full retail price but lose 50% of sales volume to other distributors or manufacturers, resulting in a damage figure of $3,177,181. Case four, however, made both adjustments by assuming both a 10% retail price discount and a 50% loss of sales volume to other distributors or manufacturers, arriving at the figure which the jury apparently accepted, $2,033,295. Dr. Seaman's fifth case consisted of a variation of case four in which the retail price was further reduced from 63 cents to 55 cents, resulting in total damages of $1,468,355. All of the cases, as stated, incorporate Thurman's estimate of lost profits for 1985-94 of $694,743.
59
The damage figure which the jury selected, Dr. Seaman's case four, then, assumed that DeLong would cut its price to 90% of list in order to meet competition but would still suffer a 50% loss of Pratt sales, and assumed that DeLong would make only one-half of all sales to Pratt with Washington Mills media. It certainly did not assume that "every single pound of Pratt & Whitney's projected media usage" would be sold by DeLong. We see nothing to indicate that the assumptions made were unreasonable or fanciful.
60
In sum and substance, the combination of the basic evidence and the testimony of the expert witnesses supported the Sherman Act verdict by providing a basis for the jury to project DeLong's lost profits, assuming different levels of sales volume and profit per sale, and utilizing a discount factor reflecting all of these other potential sales. See J. Truett Payne, 451 U.S. at 565-67, 101 S.Ct. at 1929 (1980); Copper Liquor, Inc. v. Adolph Coors Co., 624 F.2d 575, 580-81 (5th Cir.1980). We think the assumptions used here were reasonable in light of the evidence.
61
Alternatively, Washington Mills argues that Dr. Seaman's case four assumption that DeLong would have captured half of the Pratt business to the year 2019 is subject to the same fundamental fallacies as Thurman's theory of damages through 1994, namely, that there is no more basis for assuming that DeLong would have had one-half of Pratt's future business but for the termination than there is for assuming that it would have captured it at all. But the damages proof here reduced DeLong's potential sales volume to show loss of profits in open competition, and the jury verdict, to the extent it rested on Dr. Seaman's case number four, also incorporated a second adjustment assuming sales at a 90% discount off list price. We are basically dealing with a hypothetical question, in any event: what would have occurred if the defendants had not violated the antitrust laws and terminated DeLong's distributorship? See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123-24, 89 S.Ct. 1562, 1576-77, 23 L.Ed.2d 129 (1969); Malcolm v. Marathon Oil Co., 642 F.2d 845, 858-59 & n. 24 (5th Cir. Unit B 1981), cert. denied, 454 U.S. 1125, 102 S.Ct. 975, 71 L.Ed.2d 113 (1981); and Lehrman v. Gulf Oil Corp., 464 F.2d 26, 46-47 (5th Cir.), cert. denied, 409 U.S. 1077, 93 S.Ct. 687, 34 L.Ed.2d 665 (1972). On the strength of the overall evidence, exclusive of the mathematical and economic projections, the jury properly could have concluded that DeLong would have continued to sell to Pratt on the basis of the advantages of the Washington Mills product and DeLong's superior servicing and delivery capacity. The fact that Washington Mills has in fact lost the Pratt media business to another manufacturer is, at most, an indication that its overcharging and fraud preempted its participation in future sales.
62
In sum, because the district court's grant of a new trial, in a 5-page order filed more than a year after the close of trial, was based on a misreading of the evidence, the court abused its discretion in discarding the jury's verdict.
63
DeLong also appeals the grant of a new trial on the Robinson-Patman Act damages, arguing that the jury's award of $50,216.15 should be reinstated. This sum, as we have said, is identical to the amount of kickbacks which BCS received for DeLong's sales of media to Pratt. The district court granted a new trial on these damages because it concluded that the jury had latched onto this figure despite the fact that "Robinson-Patman damages must be measured by what the disfavored buyer suffered, not by what the favored buyer gained." DeLong Order, slip op. at 4. See also J. Truett Payne, 451 U.S. at 568, 101 S.Ct. at 1930 (must prove injury from price discrimination as well as fact of price discrimination in order to recover under Robinson-Patman Act), and id. on remand, 670 F.2d 575, 583 (concluding that there was insufficient evidence of damages).
64
Washington Mills defends the grant of a new trial on the theory that the J. Truett Payne cases, and Hasbrouck v. Texaco, Inc., 842 F.2d 1034 (9th Cir.1988), aff'd, 496 U.S. 543, 110 S.Ct. 2535, 110 L.Ed.2d 492 (1990), bar the award of "automatic damages" in Robinson-Patman cases, and that the jury in this case has awarded just such automatic damages by reasoning that the benefit to BCS should be the measure of the Robinson-Patman award. However, the cases actually say something much narrower: that it is impermissible to assume, from evidence of price discrimination, that the plaintiff suffered antitrust injury. While we certainly agree that the appropriate measure of DeLong's damages should be the extent of DeLong's injury, and not the extent of BCS's gain, we note that these sums may be related. It may be that the extra money paid to BCS corresponded, at least roughly, to DeLong's lost profits on sales made of the media for which it was overcharged and on sales lost to BCS, and to other damage resulting from the drain on DeLong's business of competing with a distributor receiving favorable prices. Although DeLong still was able to make a profit on the sales it did make to Pratt, the Supreme Court has made clear that passing on the increased price does not prevent a middleman from collecting Robinson-Patman Act damages. Kansas and Missouri, et. al. v. Utilicorp United, Inc., 497 U.S. 199, 110 S.Ct. 2807, 111 L.Ed.2d 169 (1990); Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977); Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968); see also Austin v. Blue Cross and Blue Shield of Ala., 903 F.2d 1385 (11th Cir.1990).
65
Nonetheless, we do not think it was error for the court to have concluded that the jury's award indicated that it had misunderstood or misapplied the law of Robinson-Patman Act damages by focusing not on the injury to DeLong but on the benefit to BCS. Nor did the trial court make any factual errors in setting aside the Robinson-Patman Act damages. While this is not a case in which the amount of the damages award was outside of the range of permissible verdicts, see 11 Wright and Miller § 2820, there are other circumstances in which a new trial may be awarded. In particular, where the verdict suggests that the jury was confused and misapplied the law, it is not an abuse of discretion to grant a new trial. E.g., Schneider v. Lockheed Aircraft Corp., 658 F.2d 835, 849 (D.C.Cir.1981), cert. denied, 455 U.S. 994, 102 S.Ct. 1622, 71 L.Ed.2d 855 (1982); Wood v. Holiday Inns, Inc., 508 F.2d 167, 175 (5th Cir.1975). While we think it conceivable that the jury viewed the kickbacks as a likely minimum measure of DeLong's damages as a result of the price discrimination, we think the district court was in a better position to determine whether the verdict in fact was the product of confusion. In addition to the verdict itself, the judge might have considered the possibility that the jury was distracted by the much larger Sherman Act damages claim and confused by the comparative weakness of the instructions he gave for calculating Robinson-Patman damages. The judge admonished the jury generally that recovery on all antitrust claims should be for injury to the plaintiff's business, but he offered no specific instructions for calculating the Robinson-Patman Act damages. Indeed, the district court's only explicit statement to the jury on the subject was the following:
66
Now, in calculating or figuring the measure of damages for price discrimination, one way that you might do that is this: The plaintiff would be entitled to recover the difference in the price of the product--strike that, that's not what I want to charge there.
67
In part because of this misstatement, Washington Mills sought a specific jury charge that DeLong could recover only in the amount of its own injury from the price discrimination, and not in the amount of BCS's gain. The court rejected this suggestion on the theory that the general admonition covered the point. He might have recalled, too, that DeLong's lawyers had advised the jury during closing argument that DeLong's injury, and not BCS's gain, was the appropriate measure of Robinson-Patman damages. Nonetheless, we cannot say that it was error to conclude, once the jury returned a verdict in the precise sum of the paybacks to BCS, that the jury had chosen this figure for impermissible reasons. Accordingly, we affirm the grant of a new trial on the Robinson-Patman damages.
68
Finally, the trial court did not err in allowing pre-judgment interest on Washington Mills' counterclaim on DeLong's open account. DeLong admitted owing the $24,532.68 amount awarded, and, hence, it is a liquidated sum within the meaning of Georgia law. Council v. Hixon, 11 Ga.App. 818, 827, 76 S.E. 603 (1912). Under Georgia law, if a party admits liability in some amount, not necessarily the amount claimed or ultimately recovered by the other party, interest may be had from the date of such admission on that amount. See Boston-Old Colony Ins. Co. v. Warr, 127 Ga.App. 364, 364, 193 S.E.2d 624, 625 (1972); Walton Motor Sales, Inc. v. Ross, 736 F.2d 1449, 1459 n. 20 (11th Cir.1984) (applying Georgia law).
CONCLUSION
69
The judgment of the district court insofar as it denied Washington Mills' motions for judgment notwithstanding the verdict is affirmed. The judgment insofar as it granted the motion for a new trial on Sherman Act damages is reversed, and on Robinson-Patman Act damages is affirmed. The judgment awarding pre-judgment interest on the counterclaim for open account indebtedness is affirmed.
*
Honorable James L. Oakes, Senior U.S. Circuit Judge for the Second Circuit, sitting by designation
1
Delong I, Delong Equip. Co. v. Washington Mills Abrasive Co., 840 F.2d 843 (11th Cir.1988), involved issues of personal jurisdiction
2
Effective December, 1991, Fed.R.Civ.P. 50(b) refers to such motions as renewed motions for judgment as a matter of law. Since these motions were filed before the amendment became effective, we use the old language of motion for "judgment notwithstanding the verdict" or "JNOV."
3
Q. [By Mr. Coe]: Given his perfect setup and his positioning and his competitive pricing, Doctor, there's not a reason in the world why he [DeLong] can't capture all of Pratt's business selling Wisconsin Porcelain, Abrasive Finishing, Capco, Vibra-finish or anybody else he can get approved, is there, Ceratech; isn't that true? [Wisconsin Porcelain, Abrasive Finishing, Capco, and Ceratech are competing manufacturers of ceramic media.]
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233 Or. 178 (1962)
376 P.2d 100
THORNBURG
v.
PORT OF PORTLAND
Supreme Court of Oregon.
Argued July 2, 1962.
Reversed and remanded November 7, 1962.
Petition for rehearing denied January 5, 1963.
*180 James H. Clarke, Portland, argued the cause for appellants. With him on the briefs were Wayne Hilliard, Cecil H. Greene, and Koerner, Young, McColloch & Dezendorf, Portland.
Lofton L. Tatum, Portland, argued the cause for respondent. With him on the brief were John G. Holden and Wood, Wood, Tatum, Mosser & Brooke, Portland.
Before McALLISTER, Chief Justice, and ROSSMAN, WARNER, PERRY, SLOAN, O'CONNELL and GOODWIN, Justices.
REVERSED AND REMANDED.
GOODWIN, J.
A trial jury denied plaintiffs the compensation which they sought in an action for "inverse condemnation".[1] In so doing, the jury necessarily found that the Port of Portland had not taken the plaintiffs' property. The plaintiffs appeal.
The issues in their broadest sense concern the rights of landowners adjacent to airports and the rights of the public in the airspace near the ground. Specifically, we must decide whether a noise-nuisance can amount to a taking.
*181 The Port of Portland owns and operates the Portland International Airport. It has the power of eminent domain. It has used this power to surround itself with a substantial curtilage, but its formal acquisition stopped short of the land of the plaintiffs. For the purposes of this case, the parties have assumed that the Port is immune from ordinary tort liability. Further, it is conceded that injunctive relief would not be in the public interest. Aircraft are not ordinarily operated by the Port itself, but by third parties which use its facilities. Air navigation and other related operations are, for all practical purposes, regulated by a federal agency. The Port merely holds the airport open to the flying public.
The plaintiffs own and reside in a dwelling house located about 6,000 feet beyond the end of one runway and directly under the glide path of aircraft using it. Their land lies about 1,500 feet beyond the end of a second runway, but about 1,000 feet to one side of the glide path of aircraft using that runway.
The plaintiffs contend that flights from both runways have resulted in a taking of their property. Their principal complaint is that the noise from jet aircraft makes their land unusable. The jets use a runway the center line of which, if extended, would pass about 1,000 feet to one side of the plaintiffs' land. Some planes pass directly over the plaintiffs' land, but these are not, for the most part, the civilian and military jets which cause the most noise.
The plaintiffs' case proceeded on two theories: (1) Systematic flights directly over their land cause a substantial interference with their use and enjoyment of that land. This interference constitutes a nuisance. Such a nuisance, if persisted in by a private party, could ripen into a prescription. Such a *182 continuing nuisance, when maintained by government, amounts to the taking of an easement, or, more precisely, presents a jury question whether there is a taking. (2) Systematic flights which pass close to their land, even though not directly overhead, likewise constitute the taking of an easement, for the same reasons, and upon the same authority.
The Port of Portland contends that its activities do not constitute the taking of easements in the plaintiffs' land. The Port argues: (1) The plaintiffs have no right to exclude or protest flights directly over their land, if such flights are so high as to be in the public domain, i.e., within navigable airspace as defined by federal law.[2] (2) The plaintiffs have no right to protest flights which do not cross the airspace above their land, since these could commit no trespass in any event. Accordingly, the Port contends, there is no interference with any legally protected interest of the plaintiffs and thus no taking of any property for which the plaintiffs are entitled to compensation. In short, the Port's theory is that the plaintiffs must endure the noise of the nearby airport with the same forbearance that is required of those who live near highways and railroads. The *183 Port's arguments, supported as they are by substantial authority, prevailed in the lower court, even though they were not entirely responsive to the plaintiffs' case. (The plaintiffs founded their case upon a nuisance theory; the defendant answered that there was no trespass.)
The trial court proceeded as if the rights of the plaintiffs were limited by the imaginary lines that would describe a cube of airspace exactly 500 feet high and bounded on four sides by perpendicular extensions of the surface boundaries of their land. The trial court thus in effect adapted the law of trespass to the issues presented in this case, and held that unless there was a continuing trespass within the described cube of space there could be no recovery. The trial court accordingly adopted the view that even if there was a nuisance, a nuisance could not give rise to a taking.
This appeal requires us to decide whether, under the circumstances of this case, the landowner has a right to have the jury pass upon his claim. If we so hold, then we have necessarily decided that the owner's interest in the use of his land free from the inconvenience of noise coming in upon him from outside his boundaries is an interest for the taking of which the government must pay. It would, of course, remain for the jury, under proper instructions, to decide when such a taking has occurred.
There is no doubt that noise can be a nuisance. See cases collected in Annotation, 44 ALR2d 1381, 1394 (1953) (dance halls); Lloyd, Noise As a Nuisance, 82 Pa L Rev 567 (1934); de Funiak, Equitable Relief Against Nuisances, 38 Ky L J 223 (1949); and Notes, 15 Or L Rev 268 (1936). At common law, one could obtain a prescriptive right to impose an unreasonable noise upon one's neighbor, and hence an *184 easement for a nuisance. Sturges v. Bridgman, LR 11 Ch D 852 (1879); Restatement, Property, § 451, Comment a. (The authorities do not all agree about when the prescriptive period begins to run,[3] but that problem is not before us now.) It is clear that freedom from unreasonable noise is a right which, in a proper case, the law will protect. On similar principles, offensive smells are treated as nuisances for which a remedy will lie. See cases collected in Annotation, 18 ALR2d 1033 (1950) (slaughterhouse). It is equally clear that a reasonable volume of noise (like a reasonable olfactory insult from industrial odors) must be endured as the price of living in a modern industrial society. See generally Restatement, Torts, §§ 822-831. Freedom from noise can be a legally protected right.
1. We come then to the facts of the case at bar. At the outset the parties concede that because of the wording of the Oregon Constitution, Art I, § 18 (eminent domain), a plaintiff aggrieved by a public activity must show that there has been a taking of his property. There must be more than merely the suffering of some damage. See, e.g., Moeller et ux v. Multnomah County, 218 Or 413, 424, 430, 345 P2d 813 (1959) (See Note, 40 Or L Rev 241 (1961)); Tomasek v. Oregon Highway Com'n, supra note 1.
2. A taking within the meaning of Oregon Constitution, *185 Art I, § 18, has been defined as "any destruction, restriction or interruption of the common and necessary use and enjoyment of the property of a person for a public purpose * * *." Morrison v. Clackamas County, 141 Or 564, 568, 18 P2d 814 (1933). See Note, 16 Or L Rev 155 (1937). The definition from Morrison v. Clackamas County, supra, is broad enough to cover a continuing nuisance, and hence the plaintiffs' case, unless there is some policy reason for limiting its application.
3. Since United States v. Causby, 328 US 256, 66 S Ct 1062, 90 L Ed 1206 (1946), and particularly since Griggs v. Allegheny County, 369 US 84, 82 S Ct 531, 7 L Ed2d 585 (1962), we know that easements can be taken by repeated low-level flights over private land. Such easements have been found in actions against the federal government (Causby) and in actions against municipal corporations (Griggs). When such easements are said to have been taken, compensation must be paid to the owners of the lands thus burdened. This much appears to be settled.
It is not so well settled, however, that the easements discussed in the Causby and Griggs cases are easements to impose upon lands near an airport a servitude of noise. Courts operating upon the theory that repeated trespasses form the basis of the easement have not found it necessary to decide whether a repeated nuisance, which may or may not have been an accompaniment of a trespass, could equally give rise to a servitude upon neighboring land. It must be remembered that in both the Causby and Griggs cases the flights were virtually at tree-top level. Accordingly, both decisions could perhaps be supported on trespass theories exclusively. Following the Causby case, several federal district courts held that while *186 repeated flights at low levels directly over private land may amount to a taking for which compensation must be paid, repeated flights nearby but not directly overhead must be endured as mere "damages" which, for various reasons, may not be compensable. See, e.g., Moore v. United States, 185 F Supp 399 (ND Tex 1960); Freeman v. United States, 167 F Supp 541 (WD Okla 1958); and see Cheskov v. Port of Seattle, 55 Wash2d 416, 348 P2d 673 (1960), where the court found no taking, but held that damages might be recoverable in a proper case under the Washington constitution.[4]
After the case at bar had been argued and submitted, the United States Court of Appeals for the Tenth Circuit, which had previously held in Batten v. United States, 292 F2d 144 (10th Cir 1961), that a complaint sounding substantially in nuisance stated a cause of action under circumstances very like those now before us, held, on the merits in the same case, that the interference with the use and enjoyment of the land complained of was a consequential damage not amounting to a taking, and adopted the rule that there must be a trespass before there can be a taking. Batten v. United States, 306 F2d 580 (10th Cir 1962). As pointed out in a dissent by Murrah, Chief Judge, the interference proven was substantial enough to *187 impose a servitude upon the lands of the plaintiffs, and under the Causby and Griggs cases equally could have constituted a taking. 306 F2d at 585. In view of the importance of the question presented in the Batten case, and in view of the strong dissent by the chief judge, it would be premature to speculate now upon the final direction the federal courts will take. We believe the dissenting view in the Batten case presents the better-reasoned analysis of the legal principles involved, and that if the majority view in the Batten case can be defended it must be defended frankly upon the ground that considerations of public policy justify the result: i.e., that private rights must yield to public convenience in this class of cases. The rationale of the case is circular. The majority said in effect that there is no taking because the damages are consequential, and the damages are consequential because there is no taking.
As we noted in a recent case which involved a different aspect of the airport problem,[5] some of the decisions reveal internal ambivalence with reference to the theory upon which they proceed. In perhaps the leading case, United States v. Causby, supra, the court used language appropriate to the law of trespass more or less interchangeably with language appropriate to the law of nuisance.[6] It appears that *188 the majority in the Batten case accepted the rule that only a trespass in the airspace directly overhead can give rise to an action for a taking, and that nuisance principles ought not to be applied in actions against the government. This may be a cogent policy argument, but it does violence to the law of servitudes.
The fact that the defendant in the case at bar is a governmental agency is of obvious importance, but, before we can decide whether to adopt one rule for governmental defendants and another for private parties, we need to know what the alternatives are. We need to know what the constitutional protection of private property means when balanced against those policy considerations which arise out of the governmental character of the defendant. In other words, as is frequently the case, we must balance apparently conflicting principles before we can tell whether or not this particular case is one for the jury.
While not every wrong committed by government will amount to a taking of private property, there are some wrongs which do constitute a taking. See, e.g., Cereghino et al v. State Hwy. Com., 230 Or 439, 370 P2d 694 (1962), and Moeller et ux v. Multnomah County, supra. Many of these wrongs involve trespassory activities. The inquiry must not beg the question, however, whether a nuisance can also amount to a taking. Whether a nuisance has, in fact, produced the results alleged by the plaintiff in this case is another matter; first we must decide whether a nuisance can ever constitute a taking. If there is a taking, then what is taken must be paid for. Armstrong v. United States, 364 US 40, 48, 80 S Ct 1563, 4 L Ed2d 1554 (1960). And see Annotation, 84 ALR 2d 348, Eminent Domain View Interference (1962).
*189 4. The subject matter of inverse condemnation is always private property. Narrowed down to a meaningful definition for the purposes of this case, however, the only "property" right of the possessor of land which has any value is his ability to use and enjoy his land. This is true whatever estate the possessor holds, whether in fee, or for life, or for years, or merely an incorporeal interest such as an easement or profit. See Ackerman v. Port of Seattle, 55 Wash2d 400, 348 P2d 664, 77 ALR2d 1344 (1960). If the government substantially deprives the owner of the use of his land, such deprivation is a taking for which the government must pay.[7]Cereghino et al v. State Hwy. Com., supra; Ackerman v. Port of Seattle, supra. If, on the other hand, the government merely commits some tort which does not deprive the owner of the use of his land, then there is no taking.[8]
*190 5. Therefore, unless there is some reason of public policy which bars compensation in cases of governmental nuisance as a matter of law, there is a question, in each case, as a matter of fact, whether or not the governmental activity complained of has resulted in so substantial an interference with use and enjoyment of one's land as to amount to a taking of private property for public use. This factual question, again barring some rule which says we may not ask it, is equally relevant whether the taking is trespassory or by a nuisance. A nuisance can be such an invasion of the rights of a possessor as to amount to a taking, in theory at least, any time a possessor is in fact ousted from the enjoyment of his land.
It now becomes relevant to consider whether a jury ought to be permitted to find that a given nuisance is so aggravated as to be a taking when the perpetrator of the nuisance happens to be the government. The Port argues that the plight of the plaintiffs in this case is indistinguishable from that of thousands of their fellow countrymen whose homes abut highways and railroads and who endure the noise without complaint. Granting the similarity, it must be noted, however, that the matter is one of degree.[9] We do not decide that the positions of the parties are the same. The Port points to our previous decisions in support of the proposition that nuisance (nontrespassory) invasions by government are not compensable. The cases cited by the Port did not, however, hold that a nuisance so aggravated as to amount to a complete ouster or deprivation of the beneficial use of property was not a taking. That *191 question does not appear to have been passed upon by our court. But cf. Wilson v. City of Portland, 132 Or 509, 514, 285 P 1030 (1930), where there is dictum to the effect that nontrespassory incursions give rise to no liability. There are cases elsewhere which tend to support the Port's theory that nuisances, when committed by government, are "legal" and therefore can never be a taking in the constitutional sense, but must always be endured with fortitude. Indeed, some authorities hold that the king can do no wrong and that the government never perpetrates a nuisance. See cases noted in 66 CJS, Nuisances 761, § 17. Again "lawful" nuisances have been held to be of such public desirability (utility) that only those portions of the invasion that could be severed from the whole and characterized as trespass could be considered in an action for damages. See, e.g., Richards v. Washington Terminal Co., 233 US 546, 34 S Ct 654, 58 L Ed 1088, LRA 1915A 887 (1914), holding that railroad noises and smoke (but not soot) must be endured where the conduct that created the nuisance is in the public interest and has been encouraged by law. The reason for assigning mystical power to trespass quare clausum fregit is elusive. But Richards v. Washington Terminal Co. did not say that the public interest demands that all governmentally approved activities (except trespass) be endured without compensation. We have found no case which goes that far, and we doubt that the constitutional right to compensation can be so construed.
6. The plaintiffs concede that single-instance torts, as torts, are not compensable. Inverse condemnation, however, provides the remedy where an injunction would not be in the public interest, and where the continued interference amounts to a taking for which *192 the constitution demands a remedy. In summary, a taking occurs whenever government acts in such a way as substantially to deprive an owner of the useful possession of that which he owns, either by repeated trespasses or by repeated nontrespassory invasions called "nuisance". If reparations are to be denied, they should be denied for reasons of policy which are themselves strong enough to counter-balance the constitutional demand that reparations be paid. None has been pointed out to us in this case.
7, 8. If we accept, as we must upon established principles of the law of servitudes, the validity of the propositions that a noise can be a nuisance; that a nuisance can give rise to an easement; and that a noise coming straight down from above one's land can ripen into a taking if it is persistent enough and aggravated enough, then logically the same kind and degree of interference with the use and enjoyment of one's land can also be a taking even though the noise vector may come from some direction other than the perpendicular.
If a landowner has a right to be free from unreasonable interference caused by noise, as we hold that he has, then when does the noise burden become so unreasonable that the government must pay for the privilege of being permitted to continue to make the noise? Logically, the answer has to be given by the trier of fact (subject to the usual exercise of the proper function of the court in screening the evidence). See Restatement, Torts, § 826, Comment d. It may be contended that the jury is an imperfect instrument in these cases, but such an argument raises constitutional and legislative questions that are not now before us. See Holden v. Pioneer Broadcasting Co., 228 Or 405, 365 P2d 845.
*193 While it is no doubt anticipatory to advert to the problem of instructing the jury in cases of this kind, it is relevant to point out that the nuisance theory provides the jury a useful method for balancing the gravity of the harm to the plaintiff against the social utility of the airport's conduct, in a way that would not be available if the trespass theory were used. In Restatement, Torts, §§ 826-831, we find principles for balancing gravity against utility which can be adapted to jury instruction so that the question of reasonableness need not be any more mysterious to the jury in this type of case than it is in an automobile accident case. The balancing of private rights and public necessity is not a novel problem.[10]
9, 10. Whether expressed in so many words or not, the principle found in the Causby, Griggs and Ackerman cases is that when the government conducts an activity upon its own land which, after balancing the question of reasonableness, is sufficiently disturbing to the use and enjoyment of neighboring lands to amount to a taking thereof, then the public, and not the subservient landowner, should bear the cost of such public benefit. Under this principle, it was error to exclude the plaintiffs' proffered testimony concerning the jet flights near his land. The real question was not one of perpendicular extension of surface boundaries into the airspace, but a question of *194 reasonableness based upon nuisance theories.[11] In effect, the inquiry should have been whether the government had undertaken a course of conduct on its own land which, in simple fairness to its neighbors, required it to obtain more land so that the substantial burdens of the activity would fall upon public land, rather than upon that of involuntary contributors who happen to lie in the path of progress.
11. As noted above, this court has expressed a policy against allowing compensation in several situations where there was no actual physical injury to the real property. The cases used terms such as "consequential damages",[12] or "damages which do not amount to a `taking'",[13] or "damnum absque injuria."[14] Such expressions describe conclusions that the court reached when it had decided that the facts involved did not measure up to the standard necessary for a "taking". Such injuries were then held to be noncompensable as a matter of law, under the policy against allowing compensation for mere "damages". Such decisions, which were no doubt right in cases of single-instance wrongs, prove too much when applied to continuing and substantial interference with the use and enjoyment of property. Ordinarily, in a case of a continuing interference, *195 whether it is substantial enough to constitute a taking will be for the jury to determine.
Another assignment of error in the case at bar challenges the failure of the court to give a requested instruction with respect to low-level flights directly over plaintiffs' land.[15] The court instead instructed the jury that only such flights as were conducted over the land at altitudes of less than 500 feet could constitute a taking.[16]
12. The challenged instruction requires us to decide when, if ever, an airport can be liable for taking property because it permits flights to and from it over private land, but within "navigable airspace". On this point, there is no doubt that a taking of private property can occur even though the flights are within navigable airspace as defined by law if the flights are below 500 feet. Matson v. United States, 171 F Supp 283 (Ct Cl 1959), held that the plaintiff should recover for a taking, even though the court recognized that the taking was accomplished in what *196 today would be navigable airspace.[17]Griggs v. Allegheny County, supra, is a square holding that taking of private property can be accomplished by planes taking off and landing within navigable airspace. 369 US 84, 82 S Ct 531, 533, 7 L Ed2d 585, 588. There is, therefore, no merit in the defense argument that all flights within the navigable airspace are automatically free from liability.[18] The debate centers on the legal effect of the 500-foot rule.
The Port's argument that flights above 500 feet are immune from private litigation seems to be based on two grounds:
(1) As a result of the legislation by Congress in denominating navigable airspace and declaring a public right of transit through it, the landowner cannot claim there has been a "trespass" through a column of air which he does not own.[19] Ownership of the navigable airspace is said to be in the public.[20]
*197 (2) As a result of the same legislation, the landowner is in a position analogous to that of a person abutting a highway or a railroad right-of-way who must be content with the incidental inconveniences that are unavoidably attendant upon those operations.[21]
The instruction given below forces a choice between consistency, which is on the side of the plaintiffs, and public convenience, which is on the side of the Port. Logically, it makes no difference to a plaintiff disturbed in the use of his property whether the disturbing flights pass 501 feet or 499 feet above his land. If he is in fact ousted from the legitimate enjoyment of his land, it is to him an academic matter that the planes which have ousted him did not fly below 500 feet.[22] The rule adopted by the majority of the state *198 and federal courts is, then, an arbitrary one. The barring of actions when the flights are above 500 feet is also difficult to reconcile with the theory that recovery should be based upon nuisance concepts rather than upon the trespass theory which we have rejected. Whether a plaintiff is entitled to recover should depend upon the fact of a taking, and not upon an arbitrary rule. The ultimate question is whether there was a sufficient interference with the landowner's use and enjoyment to be a taking.
It is sterile formality to say that the government takes an easement in private property when it repeatedly sends aircraft directly over the land at altitudes so low as to render the land unusable by its owner, but does not take an easement when it sends aircraft a few feet to the right or left of the perpendicular boundaries (thereby rendering the same land equally unusable). The line on the ground which marks the landowner's right to deflect surface invaders has no particular relevance when the invasion is a noise nuisance. Neither is a 500-foot ceiling relevant, desirable though it may be as an administrative device. If the interest to be protected is worth protecting at all, it is necessary to employ a system of rules that will meet the problem. Whatever virtue the establishment of a 500-foot floor under the cruising flight of aircraft may have as a matter of public safety, there can be only one sound reason to make it a rule of the law of real property. That reason ought to be the knowledge, derived from factual data, that flights above 500 feet do not disturb the ordinary, reasonable landowner. This may be true. We do not know that it is. It may well be that only the most sensitive are offended by such flights. It may equally be true that some of the aircraft now in use are so disturbing to those on the ground that 500 feet *199 of air will not provide protection to the landowner below. We are not justified in adopting the 500-foot rule as a rule of property law in cases of this character merely because to do so might make our work easier. The trier of fact in each case is best able to work out the solution. The difficulty was foreseen in the Causby case.[23] Congress may very properly declare certain airspace to be in the public domain for navigational purposes, but it does not necessarily follow that rights of navigation may be exercised unreasonably. The power to invade the rights of servient landowners no doubt reposes in the federal government, but there is a point beyond which such power may not be exercised without compensation. United States v. Causby, supra. The same limitation applies to lesser governmental agencies.[24] See Griggs v. Allegheny County, supra.
Unfortunately for trial judges trying to formulate instructions for juries, the cases have not dealt with the instructions to be given to the laymen who must *200 work out the answer under Oregon law. In submitting to a jury a case such as we have before us, the trial court is confronted with the need to verbalize rules as abstract as any to be found in the law, but, as we have said before,[25] the ingenuity of trial judges in formulating meaningful instructions to juries is usually equal to the task.
The idea that must be expressed to the jury is that before the plaintiff may recover for a taking of his property he must show by the necessary proof that the activities of the government are unreasonably interfering with his use of his property, and in so substantial a way as to deprive him of the practical enjoyment of his land. This loss must then be translated factually by the jury into a reduction in the market value of the land.
13. We cannot say, as a matter of law, that jet or rocket or some other kind of noise within 500 feet, or within some other number of feet, of private land might not in a particular case cause a taking for public use. The question in each case must be decided by an appropriate tribunal. Our present constitution places this duty upon the jury. If the jury proves unequal to the task, that, as noted above, is a legislative problem. If the case should arise when it is claimed that insufficient evidence was placed before the jury to support a verdict, then will be time enough to pass upon the amount of evidence necessary to get to the jury. In the case at bar, much of the evidence was excluded. As we have noted, this exclusion was error.
Other assignments of error challenge various rulings which were made in a logical and consistent *201 pattern which followed from the able trial court's view of the case as one controlled essentially by trespass concepts. On another trial, these rulings are not likely to be repeated, and need not detain us further now.
Reversed and remanded.
PERRY, J., dissenting.
I am unable to agree with the majority's views of the law of eminent domain. It should be noted that to reach a reversal of the judgment of the trial court, the majority rely upon the law of nuisance. The majority seem to admit that this has never been the law of this state, but argue that it should be. So far as I have been able to ascertain, no jurisdiction whose constitution reads as does ours has ever sustained such a proposition.
In substance, plaintiffs' assignments of error are, (1) the trial court refused to submit to the jury as evidence of a taking, evidence that airplanes did travel directly over the property owned by plaintiffs at a height of more than 500 feet, and (2) the trial court refused to submit to the jury evidence of airplane flights which do not travel over the plaintiffs' property but over property adjacent thereto. It is these adjacent flights which, if considered, must rest solely upon the law of nuisance.
Considering first the issue of flights above the 500-foot level, I am of the opinion that such flights may be considered in determining whether there has been a "taking" in the constitutional sense.
In the case of United States v. Causby, 328 US 256, 66 S Ct 1062, 90 L Ed 1206, the rule of law was established that ownership in land could not be considered in this space age as extending upward "to *202 the periphery of the universe" and that therefore Congress had the authority to declare that all navigable airspace above our land was a part of the public domain.
Congress had defined navigable airspace as that airspace above the minimum safe altitude of flight as prescribed by the Civil Aeronautics Authority. As applied to the matter before us, the minimum airspace established for safety is 500 feet. At first blush it would appear that all airspace above the 500-foot level of the plaintiffs' property, being within the public domain, plaintiffs would have no proprietary interest therein which could be taken, but I do not believe this conclusion can be sustained.
Subsequent to the determination of United States v. Causby, supra, the Civil Aeronautics Authority included in its determination of airspace the glide path and the take-off path to and from the 500-foot level to the airport. Griggs v. Allegheny County, 369 US 84, 82 S Ct 531. The Supreme Court of the United States, in considering the effect of this additional regulation within the scope of the national airport plan, provided in 49 USCA, Section 1101, et seq., stated that private ownership in land "presupposes" the use of some of the airspace above. The court therefore held there was a constitutional taking of an air easement over the plaintiff's property line directly in the glide and ascent path of the planes.
From this latter case it appears that the power of Congress to establish a navigable airspace as public domain may not authorize a trespass above the owner's property, if, as a consequence thereof, there is injury to the owner's reasonable use and enjoyment of his land.
*203 It seems to me this is a proper rule to balance public and private interests arising from the abolishment of the common-law rule that ownership in land extended upward to the periphery of the universe, therefore, where the flight directly over the land, by reason of noise and vibration, can be said in fact to cause serious interference in the owner's use and enjoyment of the property, it is a trespass, which is a constitutional taking, and requires full compensation.
In the matter before us, however, after searching the record, I am unable to find any evidence that would support a judgment of a taking, based on interference with the plaintiffs' use and enjoyment of the land by airplane flights above the 500-foot level. Therefore, in my opinion, the trial court did not err in refusing to submit this issue to the jury.
Turning now to the issue presented as to whether the flights over the lands of adjacent owners, which create a noise nuisance, can constitute a taking of the plaintiffs' property in a constitutional sense.
So far as material, our constitution, which provides for just compensation for property taken, reads as follows:
"Private property shall not be taken for public use, * * * without just compensation; * * *." Art I, § 18.
In the recent case of Cereghino v. State, 230 Or 439, 370 P2d 694, a case of inverse condemnation, this court pointed out that the taking of property in the constitutional sense was the taking of all or a part of an individual's possessory right in the property, not just interference with its use and enjoyment. The court stated:
"The Fifth Amendment of the Constitution of *204 the United States and Article I, Section 18, of the Oregon Constitution are identical in language and meaning. The word `property' in these provisions is not `used in its vulgar and untechnical sense of the physical thing with respect to which the citizen exercises rights recognized by law,' but `to denote the group of rights inhering in the citizen's relation to the physical thing, as the right to possess, use and dispose of it.' United States v. General Motors Corp., 323 U.S. 373, 377-378, 65 S.Ct. 357, 359, 89 L.Ed. 311, 156 A.L.R. 390. When the sovereign exercises the power of eminent domain `it deals with what lawyers term the individual's "interest" in the thing in question. That interest may comprise the group of rights for which the shorthand term is "a fee simple" or it may be an interest known as an "estate or tenancy for years", as in the present instance.' Ibid. See 1 Lewis, Eminent Domain (3d ed.) §§ 63, 64. Or it may be such a right as is involved in this case."
That this same rule as to a constitutional taking in an inverse condemnation suit is adhered to by the United States is found in United States v. Causby, supra. In that case government planes (heavy bombers) were flown at an elevation of approximately 87 feet directly over the Causby property as they took off and returned to the airfield. The court stated:
"* * * If, by reason of the frequency and altitude of the flights, respondents could not use this land for any purpose, their loss would be complete. It would be as complete as if the United States had entered upon the surface of the land and taken exclusive possession of it.
"We agree that in those circumstances there would be a taking. Though it would be only an easement of flight which was taken, that easement, if permanent and not merely temporary, normally would be the equivalent of a fee interest. It would *205 be a definite exercise of complete dominion and control over the surface of the land. The fact that the planes never touched the surface would be as irrelevant as the absence in this day of the feudal livery of seisin on the transfer of real estate. The owner's right to possess and exploit the land that is to say, his beneficial ownership of it would be destroyed. It would not be a case of incidental damages arising from a legalized nuisance such as was involved in Richards v. Washington Terminal Co., 233 U.S. 546. In that case property owners whose lands adjoined a railroad line were denied recovery for damages resulting from the noise, vibrations, smoke and the like incidental to the operations of the trains. In the supposed case, the line of flight is over the land. And the land is appropriated as directly and completely as if it were used for the runways themselves." (Emphasis mine.)
Again, that there may be no question of the rule of law, the court remanded the case for an accurate description of the easement taken. To the same effect is the recent case of Griggs v. Allegheny County, supra.
That the definition of a constitutional taking has consistently been grounded in the appropriation of an interest in the realty itself has been a rule of law of long standing under the Constitution of the United States is shown by the case of Portsmouth Harbor L. & H. Co. v. United States, 260 US 372, 43 S Ct 135. In this case damages were sought in inverse condemnation because of the establishment of a fort in which there were gun emplacements and shells were fired over and across the plaintiff's land. Mr. Justice Holmes, speaking for the court, said: "This is a claim in respect of land which, or an interest in *206 which, is alleged to have been taken by the United States government. * * *" (Italics mine.)
This court has always recognized and maintained this distinction between the loss of a proprietary right and damage in inverse condemnation proceedings. This is borne out by the cases cited by the majority.
In Iron Works v. O.R. & N. Co., 26 Or 224, 37 P 1016, this court carefully pointed out that the owner of property adjacent to a street has a proprietary interest in the street. And thus having a proprietary interest, this interest cannot be taken without just compensation.
This same thought is carried out in the case of McQuaid v. Portland & V. R'y. Co., 18 Or 237, 22 P 899, and to show that the court had in mind the distinction between a constitutional taking for which compensation must be paid and the creation of a nuisance which does not require compensation, I quote:
"* * * The latter will, doubtless, be obliged to submit to the ordinary inconveniences and consequences which the construction of a railroad track, and the moving of a locomotive and cars thereon, occasion be compelled to endure the smoke, noise, and screeching which naturally result from the use of that character of vehicles; but they cannot be deprived of the right of ingress and egress to and from their premises without compensation. * * *"
In Brand v. Multnomah County, 38 Or 79, 60 P 390, 62 P 209, 50 LRA 389, also cited, the court simply held that a change of grade in a street did not create an additional servitude upon an abutting owner's interest in the street. This case has no application to the matter at hand.
*207 In Kurtz v. Southern Pacific Co., 80 Or 213, 155 P 367, 156 P 794, also cited, the basis of relief in the original opinion of the court is somewhat obscure, but no doubt is left in the opinion on rehearing. The relief of injunction was granted upon the fact that there had been no prior purchase or condemnation of the owner's proprietary interest in the land, "an easement of ingress and egress," the court stating:
"The evidence discloses that the spur track of which complaint is made is a special injury affecting no other property owner than plaintiff, that it will materially and premanently [sic] affect his ingress and egress to and from his lots, and consequently his property rights are invaded in a manner which can only be lawfully done by compromise or condemnation."
Not a single Oregon case will support the theory that a mere nuisance can be considered a taking, as provided in our constitution, nor does any other jurisdiction where the language of the constitution is similar to ours hold that a mere nuisance can be considered a taking, nor does the majority cite any case so holding. The reason for this is fundamental. The law of trespass and nuisance is based upon different concepts of social justice.
A nuisance, although a tort, does not contemplate a physical invasion of the property of another, but the use of a person's own property in such a way as to interfere with another's free enjoyment of his property.
"A nuisance, in the ordinary sense in which the word is used, is any thing that produces an annoyance any thing that disturbs one or is offensive; but in legal phraseology it is applied to that class of wrongs that arise from the unreasonable, unwarrantable or unlawful use by a person of his *208 own property, real or personal, or from his own improper, indecent or unlawful personal conduct, working an obstruction of, or injury to, a right of another or of the public, and producing such material annoyance, inconvenience, discomfort or hurt, that the law will presume a consequent damage. * * *." 1 Wood on Nuisances, 3d Ed, § 1, page 1.
While a nuisance may cause as much damage to a person's enjoyment of the use of his property as a trespass, this does not mean that because an individual has suffered a damage, this damage requires compensation by the public.
"It goes without saying that the courts have never construed the `just compensation' clause of a federal or state constitution as requiring payment for all injuries imposed upon persons or property by acts of government. Any such requirement would make government itself impossible. No legislature can enact an important statute which does not directly or indirectly impose a material loss on some property owners. The imposition of a tax, the establishment of a new banking system or currency reform, the enactment of a new protective tariff, will often inflict losses on many private citizens far in excess of the total loss imposed by the most drastic act of condemnation in the history of the world. Yet no compensation for these losses is required." 1 Orgal on Valuation Under Eminent Domain, 2d Ed, § 1, page 5.
Governmental acts may be detrimental to the personal interests of adjoining land owners, but this does not constitute a taking.
"Sanitary Dist. v. Johnson, 343 Ill, 11, 174 N.E. 862 (1931) (sewage reduction plant); Winchester v. Ring, 312 Ill. 544, 144 N.E. 333, 36 A.L.R. 520 (1924) (cemetery); Schuler v. Wilson 322 Ill, 503, 153 N.E. 737, 48 A.L.R. 1027 (1926) (school); *209 Frazer v. Chicago, 186 Ill. 480, 57 N.E. 1055, 51 L.R.A. 306 (1900) (smallpox hospital); Mayfield v. Board of Education, 118 Kan. 138, 233 Pac. 1024 (1925) (school); Barry v. Smith, 191 Mass. 78, 77 N.E. 1099, 5 L.R.A. (N.S.) 1028 (1906) (contagious disease hospital). In Conger v. Pierce County, 116 Wash. 27, 198 Pac. 377, 18 A.L.R. 393 (1921) the court said: `Private property may be damaged, and its value lessened because it is located close to some public building, such as a jail, or hospital, or public hall, yet such damage is purely incidental and not recoverable. The noise consequent on the operation of railroad trains upon a private right of way may depreciate the value of adjoining private property, and be an annoyance to those living in the immediate neighborhood, but such damage is purely consequential and is not recoverable.'" 1 Orgal on Valuation Under Eminent Domain, 2d ed, § 1, page 6.
Practically all human activities engaged in carrying out a commercial enterprise may interfere with someone's enjoyment of his property. It is the right of an owner of land to use his land in any lawful manner, and it is only when the manner of use creates a grave interference with another's enjoyment of his property that the law will seek to redress this type of wrong. This is a natural requirement of organized society. There must be some give and take to promote the well-being of all. The underlying basis in nuisance law is the common-sense thought that in organized society there must be an adjustment between reasonable use and personal discomfort. No such consideration is involved in the law of trespass.
Trespass of property which, as has been pointed out, effects a taking in a constitutional sense, comprehends a physical invasion of the property either by the person or by causing a physical object to enter *210 upon or over the property of another. Martin et ux. v. Reynolds Metal Co., 221 Or 86, 342 P2d 790.
"One who intentionally and without a consensual or other privilege
(a) enters land in possession of another or any part thereof or causes a thing or third person so to do, or
(b) remains thereon, or
(c) permits to remain thereon a thing which the actor or his predecessor in legal interest brought thereon in the manner stated in §§ 160 and 161.
is liable as a trespasser to the other irrespective of whether harm is thereby caused to any of his legally protected interests." Restatement of the Law, Torts, Vol 1, § 158.
Therefore, it is the taking of an owner's possessory interest in land as compared with interfering with an owner's use and enjoyment of his land that distinguishes a trespass which is a "taking" from a nuisance, which is not.
"There is a distinction between a nuisance and a trespass, although many things are sometimes called nuisances which are mere trespasses, and it has been said that an action for a nuisance which violates a property right incident to the ownership of land is in the nature of one for trespass to realty. The difference is that a nuisance consists of a use of one's own property in such a manner as to cause injury to the property or other right or interest of another and generally results from the commission of an act beyond the limits of the property affected, while a trespass is a direct infringement of another's right of property. Thus, where there is no actual physical invasion of the plaintiff's property, the cause of action is for nuisance rather than trespass. * * *" 39 Am Jur 282, Nuisances, § 3.
*211 Morgan v. High Penn Oil Co., 238 NC 185, 77 SE2d 682.
Since a nuisance interferes with the enjoyment of the right to possess land, different rules of law apply to the balancing of the interests of owners. An owner's use of his own land will not create liability unless his use causes substantial interference with another's enjoyment of his property. 4 Restatement of Torts, Interference with the Use of Land, Ch 40, § 822, p 226. Also, the utility of the use that creates the nuisance must be weighed against the "gravity of the harm." Id, Ch 40, § 826, p 241, and Ch 40, § 828, p 250.
Such considerations are foreign to the law of trespass. A trespass imports damage and permits recovery, though no actual damage is caused. This rule of law is so well established citation of authority is unnecessary. There can be no balancing of interests.
Where a permanent trespass is committed by government, the constitution will not permit a balancing of the value of the taking for the benefit of the public against the interests of an owner. The owner must be fully compensated for his loss.
As pointed out, different policy considerations are involved in the laws of trespass which can ripen into a taking, and the laws of nuisance. The people have established these policy differences through the constitution and the enactment of laws which provide for entirely different procedures and considerations. See ORS 281.210, et seq., and ORS 105.505, et seq. This court ought not to exceed its powers to establish a different policy.
The distinction between what the law is, and a belief of what the law ought to be, is pointed out in *212 the case of Batten v. United States, 306 F2d 580 (10th Cir 1962). This case is directly in point with the issue before us, and the majority opinion therein sustains the position which I have taken here.
The majority here, as does Mr. Chief Judge Murrah in his dissent in Batten v. United States, supra, seeks to place consequential damage in the same category as a taking, without attempting to draw the distinction which has always existed in the law; that is, the taking of a possessory interest as opposed to damage.
A nuisance takes none of the title in the property. The full legal title rests in the owner. If the nuisance is abated in any manner, the damage suffered has ended and the land is again restored to its full value to the owner. On the other hand, if there is a taking, the property right of ownership or some interest therein has been transferred from the owner to the sovereign, and does not again revert to the original owner even though the use to which the property has been put by the sovereign ceases.
It may well be, as suggested by Chief Judge Murrah, that "fairness and justice, as between the State and the citizen, requires the burden imposed to be borne by the public and not by the individual alone." But the question of who should bear the burdens imposed by the creation and continuance of a great society created and maintained for the benefit of all, is, as pointed out herein, a political question to be resolved by a majority of the people through their elected representatives and not by judicial fiat.
As pointed out by the majority in Batten v. United States, supra, this course has been taken in many states by its citizens, and this is the course *213 which should be taken in this state, if the entire burden is to be borne by the public.
In setting forth the principles of law which should prevent this court as a matter of law, as well as policy, from commingling the remedies afforded under the law of eminent domain and nuisance, I do not wish to convey the thought that the plaintiffs are without a remedy. The discussion that the plaintiffs may have a remedy requires consideration of the majority's statement to the effect that an easement of nuisance may be created as between private individuals. The rule has no application to public nuisances.
This court has established the rule that a damage action lies against a municipality, which has the same immunity from suit as does the state, for the creation of a nuisance for the benefit of the public. Wilson v. City of Portland, 153 Or 679, 58 P2d 257.
We have also stated that the "convenience of the public" will not authorize the public to acquire an easement of nuisance by prescription. Ulmen v. Town of Mt. Angel, 57 Or 547, 112 P 529.
A careful reading of the case of Richards v. Washington Terminal Co., 233 US 546, 34 S Ct 657, 58 L Ed 1088, cited by the majority, will show that this decision, which permitted a recovery of damages for a nuisance, was based upon the same principles announced by this court in Wilson v. City of Portland, supra.
It is true that the damage created by a nuisance may equal a taking of the whole, but this does not justify this court in stating that a nuisance may constitute a taking of a possessory interest in land, as contemplated by our constitution.
*214 Since, as the plaintiffs state, this action was tried on the theory of inverse condemnation, the trial court committed no error in its rulings and the judgment should be affirmed. If the plaintiffs have suffered damage for a non-trespassory nuisance, they may seek redress in an action or suit, as provided by law.
For the reasons above set forth, I dissent.
Chief Justice McALLISTER and Justice ROSSMAN concur in this dissent.
NOTES
[1] Inverse condemnation is the popular description of a cause of action against a governmental defendant to recover the value of property which has been taken in fact by the governmental defendant, even though no formal exercise of the power of eminent domain has been attempted by the taking agency. See, e.g., State Highway Com. v. Stumbo et al, 222 Or 62, 66, 352 P2d 478, 480 (1960); Tomasek v. State Highway Com'n, 196 Or 120, 248 P2d 703 (1952).
[2] The Air Commerce Act of 1926, as amended by the Civil Aeronautics Act of 1938, provided that the Civil Aeronautics Authority could prescribe air traffic rules. See 49 USC (1952) § 551 (a) (7). One of these rules fixed 500 feet as the minimum safe altitude over persons, vehicles, and structures. 14 CFR 60.107 (1947 Supp). There can be do doubt that Congress has, during all material times, denominated the airspace 500 feet above any person, vessel, vehicle or structure in other than congested areas as navigable airspace which is subject to a public right of transit. The authority of Congress to pass such legislation is bottomed on the commerce power, and the validity of the legislation is not in question. See Braniff Airways v. Nebraska Board, 347 US 590, 596, 74 S Ct 757, 98 L Ed 967 (1954); Smith v. New England Aircraft Co. Inc., 270 Mass 511, 525, 526, 170 NE 385, 69 ALR 300 (1930).
[3] Where a slaughterhouse had maintained a stench for 20 years, held: it had acquired a prescriptive right to continue the nuisance. Dana v. Valentine, 5 Metc 8, 46 Mass 8 (1842). See other cases collected in Annotation, 152 ALR 343 (1944), and notes, 13 Harv L Rev 142 (1899); 21 Notre Dame Lawyer 358 (1946); 2 Wash & Lee L Rev 159 (1940). The Oregon Court has recognized (dictum) that a prescriptive right to maintain a private nuisance could be created by continuous conduct for the statutory time, although the case under study involved a trespassory invasion (drainage). Laurance et al. v. Tucker, 160 Or 474, 85 P2d 374 (1939).
[4] Unlike ours, the constitutions of several states permit the recovery of compensation for property "taken or damaged" for a public purpose. The significance of these constitutional provisions was fully discussed in Moeller v. Multnomah County, supra. Compare Oregon Constitution, Art I, § 18, and Washington Constitution, Art I, § 16. See also Tomasek v. Oregon Highway Com'n, supra note 1; Metzger v. City of Gresham, 152 Or 682, 54 P2d 311 (1936); Morrison v. Clackamas County, supra. Compare Levene et ux. v. City of Salem, 191 Or 182, 197, 229 P2d 255 (1951), where we talked as if a trespass could be either a "mere nuisance" (presumably a noncompensable one) or a "taking".
[5] Atkinson et al v. Bernard, Inc., 223 Or 624, 355 P2d 229 (1960).
[6] The case says that the landowner owns at least as much of the space above the ground as he can occupy or use in connection with the land, and that the landowner as an incident of ownership has a claim to it and invasions of it are in the same category as invasions of the surface. 328 US at 264, 265. In the same opinion, the court also says that "[f]lights over private land are not a taking unless they are so low and so frequent as to be a direct and immediate interference with the enjoyment and use of the land * * *." 328 US at 266. The commingling of trespass and nuisance language has been noted elsewhere. See 51 Northw U L Rev 346 (1962).
[7] Iron Works v. O.R. & N. Co., 26 Or 224, 37 P 1016, 29 LRA 88 (1894); McQuaid v. Portland & V. R'y Co., 18 Or 237, 22 P 899 (1889). See also Kurtz v. Southern Pacific, 80 Or 213, 155 P 367, 156 P 794 (1916). Cf. Brand v. Multnomah County, 38 Or 79, 60 P 390, 62 P 209, 50 LRA 389 (1900).
[8] The general rule is thus stated by Nichols:
"* * * [W]hen a municipal or a public service corporation, or other party to whom the power of eminent domain can be constitutionally delegated, inflicts injury upon private land under authority of and in compliance with an act of the legislature, and there has been no want of reasonable care or skill in the execution of the power, such party is not liable in an action at law for such injury, even though the same act if done without legislative sanction would be actionable, unless the injury is of such a character as to deprive the owner of the use and possession of his land, or compensation is required by special statutory or constitutional provision whenever property is damaged by the construction of a public improvement [citing cases]." 2 Nichols, Eminent Domain 293, § 6.38 (1).
See also 4 Nichols, Eminent Domain 476, § 14.1 (1), and cases collected in the annotation thereto.
[9] * * The law is not indifferent to considerations of degree." Cardozo, J., concurring in Schechter Corp. v. United States, 295 US 495, 554, 55 S Ct 837, 79 L Ed 1570, 97 ALR 947.
[10] See Madison v. Copper Co. [Madison v. Ducktown Sulphur Copper & Iron Co.], supra, where damages were allowed and the injunction was refused. And see the related case of State of Georgia v. Tennessee Copper Co., 206 US 230, 27 S Ct 618, 51 L Ed 1038, 11 Ann Cas 488 (1907), 237 US 474, 35 S Ct 631, 59 L Ed 1054 (1915), 240 US 650, 36 S Ct 465, 60 L Ed 846 (1916). Similar considerations are discussed in Booth-Kelly Lumber Co. v. Eugene, 67 Or 381, 136 P 29 (1913) and York et ux v. Stallings et al, 217 Or 13, 341 P2d 529 (1959).
[11] See Kellogg v. Mertens, (La App) 30 S2d 777 (1947), and cases discussed in Amphitheaters, Inc. v. Portland Meadows, 184 Or 336, 198 P2d 847, 5 ALR2d 690 (1948), where the plaintiffs sought damages at law for a nuisance from excessive lights. And see York et ux v. Stallings et al, supra note 10 (injunction denied); and Note, Airplane Noise: Problem in Tort Law and Federalism, 74 Harv L Rev 1581 (1961). Cf. Antonik v. Chamberlain, 81 Ohio App 465, 475, 477, 78 NE2d 752 (1947).
[12] Brand v. Multnomah County, 38 Or at 92.
[13] Moeller et ux v. Multnomah County, 218 Or supra, at 427.
[14] Barrett et al. v. Union Bridge Co., (on merits) 117 Or 220, 243 P 93, 45 ALR 521, (on petition for rehearing) 117 Or 566, 578, 245 P 308, 45 ALR 527 (1926), quoting with approval Less v. City of Butte, 28 Mont 27, 31, 72 P 140, 98 Am St Rep 545, 61 LRA 601 (1903).
[15] Requested:
"If you find from the evidence in this case that there have been flights of airplanes over plaintiffs' property originating from and going into the defendant airport during the period complained of in plaintiffs' second amended complaint, and if you further find that such flights were at such a low altitude and at such a frequency over plaintiffs' property as to be a direct and an immediate interference with the use and enjoyment thereof, then I instruct you that said interference would constitute a partial taking of the plaintiffs' property under the Constitution of the United States and the State of Oregon."
[16] Given:
"* * * I instruct you that under the law, if you find that the aircraft which may have flown over the plaintiffs' property during the period complained of were flown at heights of five hundred feet or greater above the property, such flights are within the navigable airspace and cannot be made the basis of any recovery for the plaintiffs here and your verdict must be for the defendant."
[17] In Matson v. United States, supra, the court said:
"* * * We do not think, however, that the change in the definition of navigable airspace affects plaintiffs' causes of action. The Government's easement over plaintiffs' property may be perpetual. Although today navigable airspace with its public rights of transit * * * includes the glide, its use by the United States or other aeroplane operators at heights below the minimum altitudes of flight except where necessary for take-off or landing, may require compensation * * *." 171 F Supp at 285.
[18] Since navigable airspace now includes both the cruising altitudes and the space needed for the glide, it is meaningless to say that flights in the navigable airspace cannot constitute a servitude on land. It is necessary to know how the flights affect the land. See Griggs v. Allegheny County, supra.
[19] Title 49, USC (1952):
§ 176 (a). "The United States of America is declared to possess and exercise complete and exclusive national sovereignty in the airspace above the United States * * *."
§ 403. "There is recognized and declared to exist in behalf of any citizen of the United States a public right of freedom of transit in air commerce through the navigable airspace of the United States."
§ 180. "As used in sections 171, 174-177, and 179-184 of this title, the term `navigable airspace' means airspace above the minimum safe altitudes of flight prescribed by the Civil Aeronautics Authority, and such navigable airspace shall be subject to a public right of freedom of interstate and foreign air navigation in conformity with the requirements of said sections."
[20] We need not here consider whether such ownership of the airspace is in the United States or in the individual states. See 57 Mich L Rev 1214, 1223 (1959).
[21] Brand v. Multnomah County, supra note 7; Richards v. Washington Terminal Co., 233 US 546, supra; and Matson v. United States, 171 F Supp 283, supra.
[22] See 14 J Air L & Com 112, 116, discussing a decision to the effect that "[t]he height at which an airplane operator may pass above the surface without trespassing is a question depending for solution on the facts in the particular case, and this question is unaffected by the regulations promulgated by the Department of Commerce, under the Air Commerce Act of 1926 * * *." Cory v. Physical Culture Hotel, 14 F Supp 977, 982 (WD NY 1936). In any event, unless experts, equipped with the necessary instruments, have measured each flight, it is highly unlikely that trustworthy evidence would be produced to prove the exact altitude of flights over private land.
[23] airplane is part of the modern environment of life, and the inconveniences which it causes are normally not compensable under the Fifth Amendment. The airspace, apart from the immediate reaches above the land, is part of the public domain. We need not determine at this time what those precise limits are. Flights over private land are not a taking, unless they are so low and so frequent as to be a direct and immediate interference with the enjoyment and use of the land. We need not speculate on that phase of the present case. For the findings of the Court of Claims plainly establish that there was a diminution in value of the property and that the frequent, low-level flights were the direct and immediate cause. We agree with the Court of Claims that a servitude has been imposed upon the land." United States v. Causby, supra at 266, 267.
[24] The question of who, under the current Federal definition of navigable airspace, ought to be liable for the taking is discussed in Comment, 57 Mich L Rev, 1214, 1225 (1959), and the possibility is suggested that suits could be brought against the United States. See also Harvey, Landowners' Rights in the Air Age: The Airport Dilemma, 56 Mich L Rev 1313, 1326 (1958).
[25] Williamson v. McKenna, 223 Or 366, 401, 354 P2d 56 (1960).
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164 Ariz. 218 (1990)
791 P.2d 1101
Caryle JOHNSON, Plaintiff-Appellant,
v.
Donald BRIMLOW and Rita Brimlow, husband and wife, Defendants-Appellees.
No. 1 CA-CV 89-034.
Court of Appeals of Arizona, Division 1, Department E.
May 17, 1990.
*219 Mary Fay, Santa Ana, Cal., for plaintiff-appellant.
Lenkowsky & Knochel by Paul Lenkowsky, Bullhead City, for defendants-appellees.
OPINION
VOSS, Judge.
Appellant, Caryle Johnson was the plaintiff below in this action. The defendants were Al Johnson, her former husband, and Donald Brimlow and his wife, Rita Brimlow. From a judgment favoring defendants following a bench trial, Johnson appeals. We affirm and impose attorney's fees and sanctions for a frivolous appeal.
BACKGROUND
Because this is an appeal from a judgment following trial, we set forth the facts in the light most favorable to upholding the judgment. Yano v. Yano, 144 Ariz. 382, 384, 697 P.2d 1132, 1134 (App. 1985). In 1975, the Brimlows desired to purchase some real property in Bullhead City, Arizona, on which was located a lounge called "Brandy's Cocktail Lounge." Donald Brimlow approached Al Johnson, his friend, to help make the down payment of $30,000. Johnson agreed to provide the $30,000. In return, Brimlow agreed: (1) that he would pay Johnson $15,000; and, (2) that the Johnsons would receive half of the proceeds upon later sale of the real property. Brimlow and Johnson agreed that the Brimlows would make all subsequent payments toward the purchase and would pay all taxes and insurance on the real property. Brimlow and Johnson also agreed that the Johnsons would not be involved in the operation, nor share in the profits or losses of the business.
The property was purchased, as acknowledged by a written sales agreement signed by all the pertinent individuals. The Brimlows began operating Brandy's, paid the Johnsons the agreed $15,000, made all subsequent payments toward the purchase price, and paid the taxes and insurance.
Subsequent to their initial agreement and purchase of the property, Al Johnson approached Donald Brimlow and requested that Brimlow file tax returns showing that the Johnsons and Brimlows operated the business as equal partners. Johnson requested this because he earned substantial income from other enterprises, which he wanted to offset by losses from Brandy's. Brimlow acceded and filed returns for several years showing the business as a partnership. Brimlow testified that the only reason he reported Brandy's as a partnership was to help Johnson. Brimlow also testified that he later filed amended returns showing the business as a sole proprietorship.
In 1979, the Johnsons were divorced in California with the court awarding appellant "one-half of all proceeds received by the parties from the sale of the property commonly described as Brandy's Cocktail Lounge located in Bullhead City, Arizona." In 1983, appellant filed this action against Al Johnson and the Brimlows alleging that the Johnsons and Brimlows were partners in both the real property and the business, Brandy's.
None of the defendants disputed that there was a partnership as to the real property. During the pendency of the action the court ordered the real property sold and the proceeds divided evenly, 25% each to appellant and Al Johnson, and 50% to the Brimlows. Thereafter, a one-day bench trial was held. Neither appellant nor Al Johnson attended the trial and Donald Brimlow was the only witness to testify on the underlying issues. Two other witnesses testified, both certified public accountants, but their testimony is irrelevant to the disposition of this appeal. As a result, there was no testimony rebutting Brimlow's account of the agreement. The only evidence in the record supporting appellant's allegation that she and Al Johnson were partners in the business was the tax *220 returns. However, Brimlow's explanation of the returns was undisputed.
Consistent with its earlier order directing the sale of the real property, the court ruled that there was a partnership with respect to the real property. As to the business the court ruled that there was no partnership between the Brimlows and Johnsons. The court further ruled that even if there had been such a partnership, appellant's action was barred by laches.
DISCUSSION
On appeal, appellant argues that the trial court erred: 1) by holding in the alternative that appellant's claims against the business interest were barred by laches; 2) in failing to include fixtures and equipment as elements of the property partnership; 3) in allowing the Brimlows "credits" either regarding the operation of the business, or the property partnership; and, 4) in failing to find that the Brimlows breached a fiduciary duty to account to the other partners.
Business Partnership Versus Property Partnership
Before reaching the items claimed as error by the appellant, we must comment on whether the trial court correctly found that there was no partnership as to the business, but that there was a partnership concerning the real property.
Based on its judgment and findings, it is evident that the trial court believed Donald Brimlow's testimony and therefore held that there was no business partnership. It was the function of the trial court to resolve the conflict between the tax returns and Donald Brimlow's testimony. See Yano, 144 Ariz. at 384, 697 P.2d at 1134 (weight to be given evidence peculiarly within province of trial court).
Because there is substantial evidence in the record to support the trial court's decision, and that decision is not clearly erroneous, we would affirm the holding that there was no partnership in the business. See Whittemore v. Amator, 148 Ariz. 173, 175, 713 P.2d 1231, 1233 (1986) (appellate court concerned with whether established facts reasonably support trial court's judgment). However, we need not directly reach this issue as appellant expressly conceded this holding in her appellate brief, and again through her attorney during oral argument. Appellant contends that her theories of recovery stem solely from the property partnership. We discuss the issue here because despite her admission that the trial court's holding was not error, appellant continues to raise, or at least imply, the erroneous nature of this holding throughout her argument.
Laches
Appellant argues that the court erred in finding her action barred by laches. The trial court clearly offered its ruling regarding laches as an alternative to the ruling concerning the lack of a business partnership. Appellant concedes that she does not have an interest in the business. Therefore, any argument regarding the merits of the alternative ruling is moot and frivolous.
Appellant's belief that the trial court's alternative ruling might relate to its holding regarding the property partnership is a similar exercise in futility. By holding that a real property partnership existed and awarding appellant her interest, the court necessarily precluded itself from finding that claim was barred by laches, or any other equitable defense. Moreover, neither the trial court's order, nor the record, indicate that it considered laches in the context of the real property partnership.
Fixtures and Equipment
Appellant complains that, while the trial court correctly found that a partnership existed as to the real property, it nonetheless erred by not including fixtures and equipment as elements in the property partnership. Her brief fails to specify any chattels she claims to have been transformed into fixtures and how that occurred. Instead she merely makes the broad claim that "[t]he evidence presented can infer only one conclusion, that the fixtures and equipment were annexed to the real property and hence owned by the real property partnership." This type of unsupported *221 generalization has been previously condemned:
We wish to say, however, counsel for appellant are guilty of making sweeping statements in their briefs as to what the evidence shows without taking the least pains to quote such evidence or indicate where in the record it can be found. This is not conforming with the court's rules, made to be observed and not ignored.
Lazear v. Pendergrass, 39 Ariz. 111, 116, 4 P.2d 386, 388 (1931); see also Midas Muffler Shop v. Ellison, 133 Ariz. 194, 199, 650 P.2d 496, 501 (App. 1982) (sanctions appropriate where counsel's arguments are conclusory statements unsupported by facts of case).
For a chattel to become a fixture, there must be evidence that it was attached to the real property with the intent that it become a part thereof, Murray v. Zerbel, 159 Ariz. 99, 101, 764 P.2d 1158, 1160 (App. 1988), or there must be an agreement between the parties that it be treated as a fixture. Voight v. Ott, 86 Ariz. 128, 133, 341 P.2d 923, 926 (1959).
Appellant cited no evidence in the record that any chattel became a fixture either through attachment or agreement of the parties. Furthermore, appellant failed to cite any evidence that items which may have been fixtures were not sold along with the realty, for which she was paid under the court-ordered sale.
"Credits"
Appellant contends that the Brimlows were not entitled to any "credits" because, she claims, they were unsubstantiated by supporting documentation. However, she fails to specify what she means by this contention and again leaves the court to speculate. In some instances it appears that appellant is complaining of "credits" regarding the operation of the business. If this is her contention it is inconsistent with her admission that the court correctly concluded she was not a partner in Brandy's and is entitled to nothing from its operation.
If appellant is actually complaining about "credits" regarding the real property partnership, this has no more merit than the other possibility. The partnership relationship is one of contract. G & S Investments v. Belman, 145 Ariz. 258, 267, 700 P.2d 1358, 1367 (App. 1984). The partners are free to make their own agreement for division of partnership profits. Id.
In the present case, the agreement between Donald Brimlow and Al Johnson provided that the Johnsons' profits from the real property partnership would be limited to an equal share of the proceeds from the sale of the property and that the Brimlows would be responsible for all intervening expenses.
Appellant received her share of the profits pursuant to the court's order directing the sale of the property. The order authorizing the sale and distributing the proceeds does not reduce the proceeds by any intervening expenses. Any expenses, as well as rents and profits, incurred in the interim were solely the province of the Brimlows. Appellant's argument is without merit.
Partner's Fiduciary Duty to Account
Finally, appellant complains that the court erred by not imposing damages against the Brimlows for breaching their fiduciary duty to account to the other partners. It must be repeated that appellant concedes she had no partnership interest in the business. Therefore, appellant could not possibly claim that the Brimlows were required to account to her for the business. As to the real property partnership, appellant's sole right pursuant to the agreement between Donald Brimlow and Al Johnson was to share in the proceeds from the sale, which she received pursuant to the court-ordered sale. Because she was not entitled to any profits prior to the sale of the real property, she could not have been damaged by any alleged failure to account.
SANCTIONS
Rule 25, Arizona Rules of Civil Appellate Procedure allows appellate courts to sanction, or otherwise punish, offending *222 parties and their attorneys for frivolous appeals. Frivolous appeals are not new or novel theories raised upon colorable claims, Price v. Price, 134 Ariz. 112, 114, 654 P.2d 46, 48 (App. 1982), nor positions on appeal that simply fail to prevail. Hoffman v. Greenberg, 159 Ariz. 377, 380, 767 P.2d 725, 728 (App. 1988). Instead, a frivolous appeal is one brought for an improper purpose or based on issues which are unsupported by any reasonable legal theory. Arizona Tax Research Assoc. v. Department of Revenue, 163 Ariz. 255, 787 P.2d 1051, 1054 (1989).
We do not believe that the present appeal was brought for an improper purpose. However, we do believe that the appeal is nonetheless frivolous for its failure to raise any reasonable issue regarding a meritorious claim. Much of appellant's argument is meaningless, given her concession that the trial court correctly held that she was not a partner in the business. What remains is a confusing array of assertions variously, and at times simultaneously, foisted upon incorrect propositions of law and completely unsupportable factual conclusions.
We note that frivolous appeals waste the time and energy of the opposing parties and the resources of this court. Mother Tucker's Food Experience v. Industrial Comm'n, 142 Ariz. 496, 501, 690 P.2d 797, 802 (App. 1984). More importantly the attorney has a specific duty to avoid claims for which there is no justification. E.R. 3.1, and comment, Rule 42, Supreme Court Rules.
While we do not impose sanctions lightly, we believe sanctions against appellant's attorney are appropriate.
CONCLUSION
Appellees have requested attorney's fees on appeal pursuant to A.R.S. § 12-341.01. As the underlying issues arise from an alleged partnership agreement, we employ our discretion and grant appellees' request for attorney's fees against appellant. As a sanction for filing a frivolous appeal, appellees' attorney's fees are also awarded against appellant's attorney, Rule 25, Arizona Rules of Civil Appellate Procedure. Appellees may establish the amount of the request pursuant to Rule 21, Arizona Rules of Civil Appellate Procedure.
The judgment of the trial court is affirmed.
EUBANK, P.J., and SHELLEY, J., concur.
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984 So.2d 1263 (2008)
BARDWELL
v.
STATE.
No. 5D08-291.
District Court of Appeal of Florida, Fifth District.
June 24, 2008.
Decision without published opinion. Affirmed.
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64 So.3d 1275 (2011)
CARRALBAL
v.
JP MORGAN CHASE BANK, NA.
No. 3D10-552.
District Court of Appeal of Florida, Third District.
June 17, 2011.
DECISION WITHOUT PUBLISHED OPINION
Voluntarily dismissed.
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88 Cal.App.3d 490 (1978)
151 Cal. Rptr. 688
THE PEOPLE, Plaintiff and Respondent,
v.
DORAN WRENSHALL JACKSON, Defendant and Appellant.
Docket No. 16894.
Court of Appeals of California, First District, Division One.
December 22, 1978.
*493 COUNSEL
Quin Denvir, State Public Defender, under appointment by the Court of Appeal, Clifton R. Jeffers, Chief Assistant State Public Defender, Carol Jean Ryan, Harriet Wiss Hirsch, Gail R. Weissheimer, Deputy State Public Defenders, for Defendant and Appellant.
Evelle J. Younger, Attorney General, Jack R. Winkler, Chief Assistant Attorney General, Edward P. O'Brien, Assistant Attorney General, Clifford K. Thompson, Jr., and R. Gordon Baker, Jr., Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
KONGSGAARD, J.[*]
By an amended information defendant was charged with receiving stolen property in violation of Penal Code section 496, subdivision 1. Defendant entered a plea of not guilty; trial was by jury. Defendant was found guilty as charged and sentenced to the state prison for the term prescribed by law. Defendant has appealed from the judgment of conviction.
*494 STATEMENT OF FACTS
In August of 1975 Robert Doremus, a resident of Glendale, California, reported the theft of a yellow Zeiman two-axle trailer owned by him. In January 1976 Officer Holbrook of the California Highway Patrol went to the vicinity of the home of Mrs. Jean Jackson, defendant's mother, in Ukiah, California, to investigate a report that a suspicious trailer was located on her property. Officer Holbrook had received information that the license plate on the trailer was stolen, and that the trailer was being dismantled. Holbrook drove to a public parking lot from which he could see the trailer. He read the license number and confirmed that the plate had been stolen from its owner in August 1975. He then obtained Mrs. Jackson's permission to enter the lot and inspect the trailer. It was a two-axle yellow Zeiman trailer, almost new, but had been partially dismantled with a cutting torch. Holbrook was unable to find a serial number on the trailer although such a vehicle would normally bear a serial number.
After reviewing a computer listing of stolen vehicles, Holbrook contacted Mr. Doremus, who gave him a further description of the trailer and some of its distinguishing features. Armed with this added information Holbrook returned to Mrs. Jackson's property in late January of 1976 and observed that the trailer had been further dismantled, with only the bed of the trailer remaining. Mrs. Jackson informed Holbrook that her son (the defendant) had brought the trailer to her property in the summer of 1975 and had recently removed the missing trailer parts.
In January 1976 defendant called Holbrook by telephone and within the space of one week they had several other telephone conversations as well as a personal meeting. Even though he was advised the trailer was stolen, the defendant insisted it was his and would give no explanation as to how he obtained it or where the missing parts were.
Nothing further occurred in the investigation until October 17, 1976, when Officer Marcheschi of the Ukiah Police Department observed defendant at a storage garage in Ukiah. Knowing defendant was the subject of traffic and criminal warrants of arrest, Marcheschi summoned other officers who arrested defendant on the warrants. During the arrest Marcheschi observed, through the open garage door, the missing trailer parts in the garage. Marcheschi previously had several conversations with Officer Holbrook about the stolen trailer and the missing parts. On closer observation Marcheschi noticed some of the parts had been cut with an *495 acetylene torch. Also observed in appellant's storage garage were two MG automobile engines, a Chevrolet automobile engine, two electric winches, a closed-circuit television camera, and a public address system amplifier. The serial numbers on all of the items had been removed or obliterated.
Defendant was represented by counsel through the preliminary examination and the motion to suppress. Thereafter defendant requested and was given permission by the trial court to represent himself at trial.
We consider defendant's contentions on appeal.
I. Denial of the motion to suppress pursuant to Penal Code section 1538.5.
Defendant moved to suppress all of the physical evidence taken from the storage garage on October 17, 1976. This motion was submitted on the basis of the preliminary hearing transcript. The court denied the motion and made a specific finding that all of the items taken by the officers were in plain view.
(1) It is well settled that evidence in plain view of an officer who has reached his vantage point properly may be seized without a warrant. (People v. Superior Court (Peck) (1974) 10 Cal.3d 645, 648 [111 Cal. Rptr. 565, 517 P.2d 829].) Moreover, the observation of items in plain view is not a search in the constitutional sense. (Ker v. California (1963) 374 U.S. 23, 43 [10 L.Ed.2d 726, 743-744, 83 S.Ct. 1623]; People v. Sirhan (1972) 7 Cal.3d 710, 742 [102 Cal. Rptr. 385, 497 P.2d 1121] [cert. den. 410 U.S. 947 (35 L.Ed.2d 613, 93 S.Ct. 1382)].)
(2) It is clear from the evidence produced at the preliminary hearing that the Ukiah officers acted properly in arresting appellant. Accordingly, they had a right to be at his storage garage to make the arrest. When appellant was arrested the garage door was open and the stolen trailer parts were plainly visible to Officer Marcheschi from outside the garage. Based on his knowledge of Officer Holbrook's investigation, Marcheschi had probable cause to believe the trailer components to be stolen property.
The automobile engines, electric winches and other items that were seized were also in plain view in the garage. As the stolen trailer parts were in the garage, the officers reasonably suspected that the other items *496 might also be stolen. Accordingly, it was reasonable and proper for them to extend their investigation to the engines, winches, amplifier and television camera, all of which were in plain view, to determine if they were stolen. (People v. Superior Court (Aslan) (1969) 2 Cal. App.3d 131 [82 Cal. Rptr. 507]; cf., People v. Eitzen (1974) 43 Cal. App.3d 253 [117 Cal. Rptr. 772].)
There was substantial evidence to support the factual finding of the trial court that the items taken were in plain view. The denial of the defendant's motion to suppress the evidence was not error.
II. Waiver of right to counsel.
Defendant contends he did not make a knowing and intelligent waiver of his right to counsel at trial.
In Faretta v. California (1975) 422 U.S. 806, 835 [45 L.Ed.2d 562, 581-582, 95 S.Ct. 2525], the United States Supreme Court declared that a defendant in a criminal case has a constitutional right to represent himself if he knowingly and intelligently waives his right to counsel. The court explained, "Although a defendant need not himself have the skill and experience of a lawyer in order competently and intelligently to choose self-representation, he should be made aware of the dangers and disadvantages of self-representation so that the record will establish that `he knows what he is doing and his choice is made with eyes open.'" (Ibid.) The requirement of a competent, knowing and intelligent waiver is satisfied if it is established that the defendant is literate and understanding and that he has voluntarily exercised the choice of representing himself. (People v. Dale (1978) 78 Cal. App.3d 722, 730-731 [144 Cal. Rptr. 338]; People v. Elliott (1977) 70 Cal. App.3d 984, 991 [139 Cal. Rptr. 205].)
(3) The record in this case amply demonstrates that appellant's election to proceed in propria persona was competent, knowing and intelligent. Appellant first requested permission to represent himself before the hearing on the motion to suppress. Appellant's literacy was shown by his preparation of a motion under Penal Code section 1538.5 and a related "bill of particulars" which was incorporated into the section 1538.5 motion. Moreover, his attorney expressed the belief that the defendant's intelligence and experience with the judicial system would *497 allow him to adequately represent himself. The dangers of self-representation were made apparent to the defendant by the trial judge who advised him of the complexities of a suppression motion.[1]
Defendant's understanding of his right to counsel and his decision to represent himself were further demonstrated by the fact that he had represented himself in a prior criminal proceeding.
We are satisfied the court properly granted defendant's motion to represent himself and that he knowingly and intelligently waived his right to counsel.
III. Failure to inform defendant of his privilege against self-incrimination.
The trial judge did not specifically inform defendant of his privilege against self-incrimination before defendant took the stand and testified.
(4) It is the law that "When an unrepresented defendant is about to take the stand in a criminal case, the court must make certain that the defendant is aware of his constitutional privilege not to testify. (People v. Kramer (1964) 227 Cal. App.2d 199, 201-203 ...; People v. Glaser (1965) 238 Cal. App.2d 819, 828-829....)" (People v. Wells (1968) 261 Cal. App.2d 468, 481 [68 Cal. Rptr. 400].) There is an implication, however, in People v. Wells, supra, that a clear showing on the record that the defendant was already aware of his privilege would relieve the trial court of this duty. Respondent argues that the requisite showing is demonstrated by defendant's prior experience with self-representation in criminal proceedings and by a discussion in chambers wherein defendant was advised he could be impeached by reference to a prior felony conviction should he elect to take the witness stand.
Respondent's argument is answered by People v. Kramer (1964) 227 Cal. App.2d 199 [38 Cal. Rptr. 487], and Wells. In Kramer the trial judge had advised the pro. per. defendant that if he took the stand he could be impeached by reference to a prior felony conviction. Such advice was not the equivalent of informing defendant "he had the privilege to refuse to *498 testify." (227 Cal. App.2d at p. 201.) In Wells the court observed that while the defendant's previous experience in criminal proceedings may afford some basis for the belief that defendant was aware of the privilege, it falls short of demonstration. While these circumstances may arouse a suspicion of an informed waiver, they do not equate with a clear showing in the record of an informed waiver of the privilege against self-incrimination. (261 Cal. App.2d at p. 481.) Having concluded that constitutional error occurred, we must determine the scope of the error.
In Kramer and in Killpatrick v. Superior Court (1957) 153 Cal. App.2d 146 [314 P.2d 164], the courts concluded that the failure to advise a pro. per. defendant of his constitutional right not to testify at his own trial was a denial of due process and the error was deemed to be reversible per se. In People v. Glaser (1965) 238 Cal. App.2d 819, 829-830 [48 Cal. Rptr. 427] (cert. den. 385 U.S. 880 [17 L.Ed.2d 107, 87 S.Ct. 164], rehg. den. 385 U.S. 965 [17 L.Ed.2d 310, 87 S.Ct. 402]), the court recognized the reversible per se rule of Kramer and Killpatrick, but held that the defendant could not raise the error in a collateral attack on the judgment.
On the other hand, in Wells, Justice Friedman simply employed the Chapman test of "harmless beyond a reasonable doubt" in determining the scope of error. (Chapman v. California (1967) 386 U.S. 18 [17 L.Ed.2d 705, 87 S.Ct. 824, 24 A.L.R.3d 1065].) The Wells court observed that: "Some incursions on the guarantee against self-incrimination may turn out to be so harmless in the setting of a particular case that they do not warrant reversal. (Chapman v. California (1967) 386 U.S. 18, 22-24 ...; People v. Ross (1967) 67 Cal.2d 64, 73-74 ...; see also People v. Glaser, supra, 238 Cal. App.2d at p. 829; People v. O'Bryan (1913) 165 Cal. 55, 67....) Affirmance is possible notwithstanding the error, if the reviewing court finds no reasonable possibility that the error affected the outcome of the trial. (People v. Ross, supra.)" (261 Cal. App.2d at p. 481.)
In reviewing the testimony of the pro. per. defendant in Wells, the court concluded the defendant's testimony added nothing to the proof of guilt and found the error to be harmless beyond a reasonable doubt.
In a recent opinion, Division Four of this court employed the reversible per se test which was developed in Kramer and Killpatrick. In People v. Solomos (1978) 83 Cal. App.3d 945, 954 [148 Cal. Rptr. 248], the court stated "the defendant's right not to testify at his own trial is one of the most basic and fundamental rights guaranteed by the United States and California Constitutions. Where a defendant conducts his defense *499 without the aid of counsel, his choice to waive that right and take the stand on his own behalf must be free and informed. In the absence of a knowledgeable and voluntary waiver, the pro. per. defendant, even after Faretta, cannot be said to have had a genuine choice in the matter. Under these circumstances, it must be concluded that the defendant has been denied an essential element of due process."
The Solomos court concluded that the error required reversal whether it was prejudicial or not, citing People v. Bostick (1965) 62 Cal.2d 820, 824 [44 Cal. Rptr. 649, 402 P.2d 529]. As we read Bostick, however, it appears to us to hold that error of constitutional dimension, including a denial of due process, is not necessarily reversible per se. (See People v. Bostick, supra.) Under this reasoning "Affirmance is possible notwithstanding the error, if the reviewing court finds no reasonable possibility that the error affected the outcome of the trial. [Citation.]" (People v. Wells, supra, 261 Cal. App.2d at p. 481.)
(5) We prefer to follow the reasoning of the Wells court and review defendant's testimony under the Chapman test. Moreover we note that the Solomos court recognized the viability of the Chapman test in determining the scope of error. In addition to its holding that the error was reversible per se, the Solomos court did apply the Chapman test. In applying Chapman, it concluded that under all the circumstances of the case it was unable to state with certainty that the error was harmless beyond a reasonable doubt.
In the case at bench defendant bases his contention of prejudicial error primarily on the ground that during his testimony he "confessed" to the possession of a lost or stolen license plate. That testimony, however, was not news to the jury; it only reiterated facts already well known to the jurors. The jury already knew his story of how he found the plate; he had told it to Officer Holbrook in their phone conversation of January 27, 1976. He even said on tape that he had wondered if the plate were a "problem." In his opening statement, appellant was listing his reasons for believing that the trailer was properly his, and ended with "though it did have a strange license plate." Moreover, the jury had also heard from the former owner of the plate, the officer who found it on the trailer in appellant's mother's yard and determined that it had been stolen, and appellant's mother, who said the plate might not have been on the trailer when it arrived in her yard.
Defendant's own testimony in other particulars related to the seller's receipt for the trailer, a discussion about the pink slip, the price of the *500 trailer, the purchase date, and an explanation of his removal of the identification numbers on other equipment. Except for the revelation of a few minor details, defendant's own testimony simply reiterated a story well known to the jury and added nothing new to the proof of guilt.
In light of the compelling evidence of appellant's guilt presented by the People in its case-in-chief, there can be no reasonable doubt that the verdict would have been the same had appellant been warned by the court and had he refrained from taking the stand. We declare a belief the error was harmless beyond a reasonable doubt. (See Chapman v. California, supra, 386 U.S. at p. 24 [17 L.Ed.2d at pp. 710-711].)
IV. Adequacy of notice of charges.
After defendant's special demurrer to the original information was sustained, an amended information was filed charging a violation of Penal Code section 496, subdivision 1, receiving stolen property. Defendant did not demur to the amended information. He now argues that the amended information failed adequately to specify the particular stolen property allegedly received or concealed by him.
Defendant expects too much of the information. (6) "The function of criminal pleadings under California law is to give an accused notice of the offense with which he is charged but not to provide him with notice of the particular circumstances of the charge, for such circumstances are furnished him in a transcript of the testimony on which the indictment or information is founded. (People v. Marshall, 48 Cal.2d 394, 399 fn. 5....) Any uncertainty in the pleading amounts to no more than a defect of form, which should be attacked by demurrer under Penal Code section 1004. Failure to demur to an information on the ground of uncertainty constitutes a waiver of the objection (People v. Heim, 196 Cal. App.2d 1, 5 ...; People v. Burness, 53. Cal. App.2d 214, 218 ...), and the validity of a subsequent judgment is not affected. (Pen. Code, § 960.)" (People v. Washington (1971) 17 Cal. App.3d 470, 475 [94 Cal. Rptr. 882], disapproved on other grounds in People v. Najera (1972) 8 Cal.3d 504, 509, fn. 4 [105 Cal. Rptr. 345, 503 P.2d 1353].)
By failing to demur to the amended information defendant has waived any objection on the ground of uncertainty.
(7) Moreover, we observe that the amended information, viewed in light of the testimony adduced at the preliminary hearing, provided *501 defendant with sufficient notice of the charge against him to satisfy due process. Defendant's contention that he was not informed exactly what property he was accused of receiving is plainly without merit. The trailer and the license plate were the only property shown at the preliminary hearing to have been stolen. We also note that in his brief defendant concedes that it appeared from the preliminary hearing he was held to answer with respect to the trailer only. The remaining property in the garage was introduced in evidence at the time of trial for the limited purpose of showing defendant's knowledge that the trailer was stolen and to show a common plan and scheme of removing identification from valuable property. Defendant cannot reasonably claim confusion of constitutional dimension in not knowing what stolen property he was charged with receiving.
V. Evidence of other possible offenses.
(8) Defendant makes an additional assignment of error that the admission in evidence of these other items of personal property taken from the storage garage was prejudicial. These items all had obliterated or missing serial numbers. As noted above these items were admitted into evidence by the trial court with a proper limiting instruction that such evidence was to be considered by the jury for the limited purpose of showing knowledge or common scheme and plan[2] and for no other purpose. The items were clearly admissible for the purposes described. Moreover, we note that no objection was raised to the introduction of such evidence at trial. Any claim of error is therefore obviously waived.
VI. Denial of request for continuance.
Penal Code section 1050 declares a policy that criminal cases be heard at the earliest possible time. In furtherance of that policy, it provided in part, at applicable times: "No continuance of a criminal trial shall be granted except upon affirmative proof in open court, upon reasonable notice, that the ends of justice require a continuance." (§ 1050 was amended by Stats. 1977, ch. 316, § 18, p. 1263, eff. Aug. 11, 1977.) In People v. Bethea (1971) 18 Cal. App.3d 930, 937 [96 Cal. Rptr. 229] (cert. den. 405 U.S. 1042 [31 L.Ed 584, 92 S.Ct. 1325]), the court said: "It is established law that the determination of whether a defendant has affirmatively demonstrated that justice requires a continuance is a factual matter and will not be disturbed on appeal in the absence of a clear abuse of discretion by the trial court."
*502 (9) After his Faretta motion was granted defendant was given 10 days to prepare for trial. His request for continuance was denied. Defendant claims an abuse of discretion.
In this case the record fails to demonstrate any such abuse of discretion. The basis given for the continuance motion was that defendant needed additional time to prepare his defense. However, defendant did not show that he had used due diligence and reasonable effort to prepare for trial, as required by People v. Johnson (1970) 5 Cal. App.3d 851, 859 [85 Cal. Rptr. 485]. Rather than showing a reasonable need for a continuance, the record demonstrates that defendant had ample time to prepare his defense. He had reason to believe that he would be representing himself 73 days prior to trial and was given 10 days to prepare his defense after his Faretta motion was formally granted. Further, he had actively participated in his defense prior to that time.
At oral argument appellate counsel called our attention to People v. Cruz (1978) 83 Cal. App.3d 308 [147 Cal. Rptr. 740], which held that the trial court's denial of a request for continuance by a pro. per. defendant was an abuse of discretion. Defendant's reliance on Cruz is misplaced. In Cruz, defendant had been in custody for two and one-half months and was released on bail only four days before his trial was slated to commence. His pro. per. motion for continuance was made on the day set for trial and was denied. Moreover, defendant's motion for continuance was based upon his uncontroverted allegation that he needed additional time to attempt to locate and secure the attendance of a material witness who would give testimony relevant to his principal defense of involuntary intoxication.
No such unusual or extenuating circumstances faced defendant in the case at bench nor were any called to the attention of the trial court. The defendant here had not been in custody prior to trial and had actively participated in trial preparation with counsel prior to the time he chose to proceed in pro. per. We find no abuse of discretion in the denial of the motion for continuance.
Having considered all of the contentions of defendant on appeal, we find no reversible error.
Judgment affirmed.
Racanelli, P.J., and Newsom, J., concurred.
A petition for a rehearing was denied January 17, 1979, and appellant's petition for a hearing by the Supreme Court was denied February 28, 1979.
NOTES
[*] Assigned by the Chairperson of the Judicial Council.
[1] The inquiries to be made and the advice to be given by a trial judge to a pro. per. defendant to emphasize the dangers of self-representation have been catalogued by Justice Gardner in People v. Lopez (1977) 71 Cal. App.3d 568 [138 Cal. Rptr. 36]. We commend this procedure to trial courts; we note, of course, that the case at bench was tried before the opinion in Lopez was filed.
[2] CALJIC No. 2.50.
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NUMBER 13-07-00459-CR
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
_______________________________________________________
TRINA ANNETTE MARSHALL, Appellant,
v.
THE STATE OF TEXAS, Appellee.
_______________________________________________________
On appeal from the 36th District Court
of San Patricio County, Texas.
_______________________________________________________
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Garza
Memorandum Opinion Per Curiam
Appellant, Trina Annette Marshall, attempts to appeal her convictions for possession
of cocaine and money laundering. The trial court has certified that this "is a plea-bargain
case, and the defendant has NO right of appeal." See Tex. R. App. P. 25.2(a)(2).
On August 16, 2007, this Court notified appellant's counsel of the trial court's
certification and ordered counsel to: (1) review the record; (2) determine whether appellant
has a right to appeal; and (3) forward to this Court, by letter, counsel's findings as to
whether appellant has a right to appeal, or, alternatively, advise this Court as to the
existence of any amended certification.
On December 14, 2007, counsel filed a letter brief with this Court. Counsel's
response does not establish that the certification currently on file with this Court is incorrect
or that appellant otherwise has a right to appeal.
The Texas Rules of Appellate Procedure provide that an appeal must be dismissed
if the trial court's certification does not show that the defendant has the right of appeal.
Tex. R. App. P. 25.2(d); see Tex. R. App. P. 37.1, 44.3, 44.4. Accordingly, this appeal is
DISMISSED. Any pending motions are denied as moot.
PER CURIAM
Do not publish.
Tex.R.App.P. 47.2(b)
Memorandum Opinion delivered and
filed this the 17th day of January, 2008.
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410 B.R. 460 (2009)
In re Donovan Wayne RIDDLE and Karla Denise Riddle, Debtors.
No. 07-45567 (DML).
United States Bankruptcy Court, N.D. Texas, Fort Worth Division.
August 13, 2009.
*461 Jason Paul Miller, Robert A. Higgins & Associates, P.C., Benbrook, TX, for Debtors.
Memorandum Opinion
D. MICHAEL LYNN, Bankruptcy Judge.
Before the court is Debtor's [sic] Modification of Chapter 13 Plan After Confirmation (the "Second Modification") filed by Donovan and Karla Riddle ("Debtors") on May 20, 2009. The court considered the Second Modification at a hearing on July 16, 2009 (the "Hearing"). At the Hearing the court heard argument from counsel for Debtors and the chapter 13 trustee (the "Trustee") as well as testimony from Donovan Riddle ("Mr.Riddle").
The court exercises core jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334(a) and 157(b)(2)(A) and (L).
I. Background
Debtors filed the above-styled case under chapter 13 of the Bankruptcy Code (the "Code") (11 U.S.C. §§ 101 et seq.) on December 14, 2007. Debtors submitted the required schedules and their proposed plan on January 3, 2008. Debtors subsequently amended Schedule I on January 14, 2008, and once more on March 4, 2008.[1] On April 23, 2008, the Trustee submitted a proffer to the court stating Debtors' disposable income as $2,315.81 and recommending confirmation of Debtors' plan. Debtors' plan, which provided for monthly payments of $819 for the first 15 months and $2,405 for the final 45 months, was subsequently confirmed by the court. At confirmation it was expected that the plan would provide for 100% payment of unsecured creditors.
On May 20, 2009, Debtors filed a plan modification (the "First Modification"), seeking to modify their payments to $965 for the final 45 months. The First Modification would have resulted in no payment to unsecured creditors. The Trustee objected to the First Modification,[2] claiming the modified plan would not meet the "good faith test under 11 U.S.C. § 1329(b)(1) and 11 U.S.C. § 1325(a)(3) based on the totality of the circumstances surrounding the Modified Plan, and/or the disposable income test under 11 U.S.C. § 1325(b)(1)(B) and § 1325(b)(4)." Debtors then filed the Second Modification, again seeking to modify their plan payments to $965 for the final 45 months, again returning 0% to unsecured creditors. Debtors subsequently amended their Schedules I and J to reflect a decrease in Mr. Riddle's income.[3] The Trustee objected to the Second Modification (the "Objection") for the same reasons that he objected *462 to the First Modification.[4] Debtors filed a response to the Trustee's objection.
At the Hearing, the Trustee argued that Debtors, through a step-up plan, had paid less during the first 15 months of their plan than they could have given their disposable income. Had Debtors paid their total disposable income during those 15 months, even after modifying the plan to account for Debtors' reduced income, unsecured creditors would have received a substantial dividend. Mr. Riddle testified that the excess disposable income, which had not been contributed to the plan during the first 15 months, was used to pay essential expenses including expenses related to child care and treatment of his daughter's asthma. Mr. Riddle also admitted that Debtors could afford to pay $973 per month rather than the $965 proposed under the Second Modification.
II. Issue
The issue posed to the court is whether a debtor, who under a step-up plan pays less than full disposable income in the initial months, acts in good faith in proposing a modification to that plan, due to changes in circumstances, that does not provide as great a return to the debtor's creditors as they would have received had the debtor paid to the trustee his or her full disposable income during the initial months.[5]
III. Discussion
1. Valid Reasons For Modification
Chapter 13 of the Code allows for post-confirmation modification of a plan in certain circumstances. Section 1329 provides, in relevant part:
(a) At any time after confirmation of the plan but before the completion of payments under such plan, the plan may be modified, upon request of the debtor, the trustee, or the holder of an allowed unsecured claim, to
(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan;
(2) extend or reduce the time for such payments ...
(b)
(1) Sections 1322(a), 1322(b), and 1323(c) of this title and the requirements of section 1325(a) of this title apply to any modification under subsection (a) of this section.
(2) The plan as modified becomes the plan unless, after notice and a hearing, such modification is disapproved.
A debtor may wish to modify a plan for a number of reasons including a decrease in income or unexpected medical bills. See Green Tree Acceptance v. Hoggle (In re Hoggle), 12 F.3d 1008, 1010 (11th Cir. 1994); 4 COLLIER ON BANKRUPTCY ¶ 1329.02 *463 (15th ed. rev.2007). While some circuits require that a change in the debtor's circumstances be substantial or unanticipated before permitting a plan modification, this circuit does not require that a change meet such a test. Meza v. Truman (In re Meza), 467 F.3d 874, 877-878 (5th Cir. 2006).
In their response to the Trustee's objection to the Second Modification, Debtors claim that they seek to modify their plan because their monthly income has decreased due to a decrease in Mr. Riddle's overtime hours and because their medical expenses have increased due to their daughter's asthma. Clearly, the changes in Debtors' circumstances constitute valid reasons to seek a plan modification. Because in this jurisdiction it is not necessary that a change in circumstances be unanticipated or substantial, there is no need for the court to find more than that Debtors have suffered changes in circumstance warranting modification of their plan.
2. Good Faith
The Trustee's objection to the Second Modification alleges that the modified plan does not meet the good faith test under section 1329(b)(1) and section 1325(a)(3). Section 1329(b)(1) makes the requirement of section 1325(a)(3) that the plan be proposed in good faith applicable to plan modifications. In re Davis, 404 B.R. 183, 189 (Bankr.S.D.Tex.2009).
The good faith test under section 1325(a)(3) requires the court to consider the "totality of the circumstances" surrounding proposal of a plan (or, here, a modification). Suggs v. Stanley (In re Stanley), 224 Fed.Appx. 343, 346 (5th Cir. 2007). In applying this test the court is to examine all of the facts in order to determine whether the debtor acted in good faith. Id. The purpose of the good faith test is "to bar confirmation of a chapter 13 plan where the debtor either does not intend to effectuate the plan as proposed or where the proposed plan is for a purpose not permitted under title 11." In re Chaffin, 816 F.2d 1070, 1074 (5th Cir.1987) (quoting S.Rep. No. 150, 97th Cong., 1st Sess. 18 (1981)).
In the case at bar the court concludes that Debtors proposed the Second Modification in good faith. The reasons for which Debtors have sought modification are valid, no creditor has objected to the modification, substantially all of Debtors' disposable income will be committed to the plan going forward, and the evidence makes it clear Debtors intend to effectuate their plan as amended by the Second Modification.
The court is, of course, troubled, as was the Trustee, by the loss to creditors of the difference between Debtors' disposable income and their plan payments during the first 15 months of their case. While Debtors' explanation for the expenditure of those moneys is reasonable, the decision that the funds should satisfy Debtors' excess expenses rather than be paid against claims of creditors should have been made before exhaustion of the funds, not retrospectively. In the present context, the court is left with little choice but to accept Debtors' assurances that payment of their full disposable income to the Trustee was not practicable. Since, as a practical matter, Debtors lack the ability to make up the difference between what was paid and their past disposable income, the only alternative for the court is to force dismissal of Debtors' case, likely followed by a refiling. While this might serve as a suitable quasi-sanction on Debtors (assuming they deserve such), it is hardly a sensible course.
*464 Moreover, the court is itself to some extent at fault. Allowing debtors to confirm plans that defer, through step-up provisions, payment of presently available disposable income amounts to letting the debtors borrow against their future. As the case at bar all too clearly demonstrates, confirmation of such a step-up plan can leadand can reasonably be expected to leadto unfortunate results for the debtors, the trustee, the creditors, and the court.
3. Step-Up Plans
Step-up plans can serve a purpose. The Fifth Circuit has stated that analysis of a debtor's "projected disposable income," as defined in section 1325(b)(1), should take into account "evidence of present or reasonably certain future events that [will] substantially change the debtor's financial situation." Nowlin v. Peake (In re Nowlin), 576 F.3d 258, 266-67 (5th Cir.2009). A step-up plan would be appropriate, for example, if the debtor were promised an automatic pay increase after 6 months or if the debtor proposed to fund his or her plan in part through future sales of assets. However, a step-up plan is inappropriate in cases such as this where the effect is solely to defer the pain of contributing the debtor's entire disposable income to performance of his or her plan.
The court therefore concludes that it will no longer routinely confirm plans like that in the instant case. Absent an evidentiary record demonstrating satisfactorily that the plan will be fully performed or that creditors will certainly be paid as contemplated by Code § 1325(a)(4) and (b), the court is unlikely to confirm any plan that provides for payments from the inception of the chapter 13 case of less than 90% of the debtor's disposable income.[6]
III. Conclusion and Disposition
For the foregoing reasons the Second Modification will be approved, but with payments of $973 per month, rather than $965 per month. Because of the unusual circumstances of this case Debtors will be required to submit their pay-stubs and all other relevant financial information describing their current income and expenses to the Trustee on a monthly basis. Should Debtors' income increase by more than 5% or their expenses decrease by more than 5%, the Trustee may propose a modification to increase Debtors' plan payments.
The Trustee is instructed to submit an order reflecting the foregoing.
NOTES
[1] These amendments significantly altered Schedule I by first adding, then increasing Karla Riddle's income.
[2] As far as the court can glean from the record, the First Modification and the Trustee's objection were never disposed of.
[3] The effect of Mr. Riddle's reduced income (which occurred because of reduced overtime), was to reduce Debtors' actual disposable income to $980 per month, as reflected on Schedule J.
[4] At the Hearing counsel for the Trustee stated that the Trustee was objecting to the proposed modification on the basis of good faith. Counsel for the Trustee did not press the issue of the disposable income test under Code § 1325(b)(1)(B) or Code § 1325(b)(4). Therefore, the court will not address that issue.
[5] At the Hearing the court stated that it would consider the Second Modification in light of all of the tests required under Code § 1325. After careful consideration the court concludes the only test, other than that for good faith, that might support denial of the Second Modification is the best interest of the creditors' test under Code § 1325(a)(4). At the Hearing Mr. Riddle testified that Debtors own no non-exempt property; therefore, under a chapter 7 liquidation unsecured creditors would receive nothing and the best interest of creditors test does not require denial of the Second Modification. Furthermore, it is inappropriate for the court to revisit the issue of whether the plan is in the best interest of the creditors, post confirmation, when the facts have not changed as to that issue. See In re Braune, 385 B.R. 167, 172 (Bankr.N.D.Tex. 2008). This is the case in the instant matter.
[6] In some cases, a step-down plan may be appropriate at the outset. In other cases, subsequent events such as the failure of some creditors to file claims, may make it unnecessary for the debtor to pay as much as initially anticipated. In such a case, when it becomes clear that a lower monthly payment will permit full compliance with the requirements of chapter 13, a modification under Code § 1329 will be appropriate.
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COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-12-00407-CR
CHARLES SAMUEL BURGESS II APPELLANT
V.
THE STATE OF TEXAS STATE
----------
FROM THE 396TH DISTRICT COURT OF TARRANT COUNTY
----------
MEMORANDUM OPINION1
----------
I. INTRODUCTION
A jury convicted Appellant Charles Samuel Burgess II of one count of
continuous sexual abuse of young children and one count of indecency with a
child. See Tex. Penal Code Ann. § 21.02 (West Supp. 2013), § 21.11 (West
2011). The jury assessed his punishment at 99 years’ confinement for the
1
See Tex. R. App. P. 47.4.
continuous sexual abuse conviction and 20 years’ confinement for the indecency
with a child conviction. The trial court sentenced him accordingly, ordering the
sentences to run concurrently. In six issues, Burgess appeals his convictions.
We will affirm.
II. FACTUAL BACKGROUND
At the time of the events at issue here, Burgess was married to Shirley.
They had recently moved from Ohio to Arlington, Texas. Their adult daughter
Sarah lived with her husband and four children in Frisco.2 Burgess and Shirley
proposed that each of Sarah’s children celebrate his or her birthday by spending
time with ―Popo‖ (Burgess) and ―Gaga‖ (Shirley) at their house in Arlington.
A. Amber and Burgess
Sarah’s oldest child is Amber. For Amber’s eleventh birthday, she stayed
at her grandparents’ house for a few nights. She spent most of the trip with
Shirley, doing ―girly stuff.‖ There were times, however, when Shirley had to work,
and Amber was left alone with Burgess. One day while Burgess was looking
after Amber, he joined her in an upstairs entertainment room. Amber was sitting
down, watching television. Burgess began to massage her back. He started
near her neck and progressively moved his hands down her spine. At some
point, he reached his hand inside of her clothing and touched her female sex
2
To protect the anonymity of the children in this case, we will use aliases to
refer to some of the individuals named herein. See Daggett v. State, 187 S.W.3d
444, 446 n.3 (Tex. Crim. App. 2005); McClendon v. State, 643 S.W.2d 936, 936
n.1 (Tex. Crim. App. [Panel Op.] 1982).
2
organ. He then removed her clothing and continued to touch her sex organ for
approximately thirty minutes until he fell asleep. Amber then escaped to a guest
bedroom, where she locked the door, put her clothes back on, and waited for
Shirley to return home. Amber did not tell Shirley what happened.
A year later, Amber returned to her grandparents’ house to celebrate her
twelfth birthday. On the first two days of her visit, while Shirley was at work,
Burgess once again removed Amber’s clothing and used his hand to touch her
sex organ. On the second day of her visit, Burgess also kissed her on the
mouth.
On another occasion, Burgess was at Sarah’s home in Frisco babysitting
all four of the children. Everyone was watching a movie together. Burgess sat
with Amber on the couch behind the other three children. While the movie was
playing, Burgess led Amber’s hand inside of his clothing and had her grasp his
penis. The touching lasted for the duration of the movie.
B. Kelsey and Burgess
Sarah’s second oldest child is Kelsey. Kelsey took a birthday trip to her
grandparents’ house to celebrate her ninth birthday. During the visit, Shirley took
her horseback riding. Once while Burgess was alone with Kelsey, he removed
her clothing and touched her chest area. He also touched and penetrated her
sex organ with his fingers. Kelsey and Burgess played a game of ―strip Connect
4‖ during the visit. According to Kelsey, the game required the loser of each
round to remove an article of clothing.
3
C. Amber’s and Kelsey’s Outcry
Amber and Kelsey first spoke of their encounters with Burgess by telling
their friend, Heather. The girls made Heather promise not tell anyone, but
Heather eventually told her mother, who then told Sarah. Sarah spoke to Amber
and Kelsey individually, and each girl confirmed that the information Sarah had
received was accurate. Sarah took the girls to the Children’s Advocacy Center of
Denton, where they gave detailed accounts to a child forensic interviewer and a
sexual assault nurse.
III. SUFFICIENCY OF THE EVIDENCE
In his first issue, Burgess contends that Amber and Kelsey were not
credible witnesses and that, without their testimonies, the evidence is insufficient
to sustain his convictions.
The trier of fact is the sole judge of the weight and credibility of the
evidence. See Tex. Code Crim. Proc. Ann. art. 38.04 (West 1979); Winfrey v.
State, 393 S.W.3d 763, 768 (Tex. Crim. App. 2013). Thus, when performing an
evidentiary sufficiency review, we may not re-evaluate the weight and credibility
of the evidence and substitute our judgment for that of the factfinder. Isassi v.
State, 330 S.W.3d 633, 638 (Tex. Crim. App. 2010); see also Banda v. State,
890 S.W.2d 42, 50 (Tex Crim. App. 1994), cert. denied, 515 U.S. 1105 (1995)
(―The jury is the exclusive judge of the credibility of witnesses and of the weight
to be given their testimony.‖); Sharp v. State, 707 S.W.2d 611, 614 (Tex. Crim.
4
App. 1986) (―The jury . . . could choose to believe or not believe the witnesses, or
any portion of their testimony.‖), cert. denied, 488 U.S. 872 (1988).
As proof that the girls fabricated their testimonies, Burgess points to
portions of the record that demonstrate that the girls’ behavior—both their
general demeanor and their relationship with him—did not materially change
after their birthday visits. Specifically, he notes the following: (1) Kelsey testified
that Amber did not act differently when she returned home from her first birthday
trip, (2) Sarah testified that she did not notice any change in the girls’ behavior
that alarmed her, (3) Sarah testified that the girls’ relationship with Burgess did
not change after their birthday trips and that Amber went for her second birthday
trip without complaint, and (4) the girls’ aunt testified that she attended a family
gathering after the birthday visits and that both girls were affectionate toward
Burgess. Burgess argues that this evidence is inconsistent with allegations that
he maintained a sexual relationship with the girls. But the jury heard this
evidence, and it heard Amber and Kelsey’s testimonies describing the sexual
encounters. After hearing and weighing all the evidence, the jury apparently
resolved any inconsistencies in favor of the State. See Banda, 890 S.W.2d at
50; Sharp, 707 S.W.2d at 614. And because Amber and Kelsey were under
seventeen years of age at the time of the sexual assaults, their testimonies, even
without corroboration, are sufficient to support Burgess’s convictions. See Tex.
Code Crim. Proc. Ann. art. 38.07 (West Supp. 2013); Sennett v. State, 406
S.W.3d 661, 666 (Tex. App.—Eastland 2013, no pet.). Because this court must
5
defer to the jury on matters of the weight and credibility of evidence, we overrule
Burgess’s first issue. See Tex. Code Crim. Proc. Ann. art. 38.04; Winfrey, 393
S.W.3d at 768.
IV. LESSER-INCLUDED-OFFENSE INSTRUCTION
In his second issue, Burgess argues that the trial court erred by denying
his request for a lesser-included-offense instruction on assault by contact.
We use a two-step analysis to determine whether an appellant was entitled
to a lesser-included-offense instruction. Hall v. State, 225 S.W.3d 524, 528 (Tex.
Crim. App. 2007); Rousseau v. State, 855 S.W.2d 666, 672–73 (Tex. Crim.
App.), cert. denied, 510 U.S. 919 (1993). First, the lesser offense must come
within article 37.09 of the code of criminal procedure. Tex. Code Crim. Proc.
Ann. art. 37.09 (West 2006); Moore v. State, 969 S.W.2d 4, 8 (Tex. Crim. App.
1998). Second, some evidence must exist in the record that would permit a jury
to rationally find that if the appellant is guilty, he is guilty only of the lesser
offense. Hall, 225 S.W.3d at 536; Salinas v. State, 163 S.W.3d 734, 741 (Tex.
Crim. App. 2005); Rousseau, 855 S.W.2d at 672–73.
Here, Burgess was charged with one count of continuous sexual assault of
young children, one count of aggravated sexual assault, and three counts of
indecency with a child. At trial, Burgess denied touching the girls’ sex organs
and Kelsey’s chest, but he said that he may have touched the girls on their hips.
Based on this testimony, Burgess argues he was entitled to a jury instruction on
the lesser offense of assault by contact because there was some evidence that a
6
jury could find him guilty of that lesser offense. But before we engage in the
second step of our analysis, as Burgess requests, we must determine whether
assault by contact comes within article 37.09 of the code of criminal procedure.
See Tex. Code Crim. Proc. Ann. art. 37.09; Moore, 969 S.W.2d at 8.
Under article 37.09(1)—the applicable subsection here—an offense is a
lesser-included offense of another offense if the indictment for the greater-
inclusive offense either: (1) alleges all of the elements of the lesser-included
offense or (2) alleges elements plus facts (including descriptive averments, such
as non-statutory manner and means, that are alleged for purposes of providing
notice) from which all of the elements of the lesser-included offense may be
deduced. Ex parte Watson, 306 S.W.3d 259, 273 (Tex. Crim. App. 2009) (op. on
reh’g). Both statutory elements and any descriptive averments alleged in the
indictment for the greater-inclusive offense should be compared to the statutory
elements of the lesser offense. Id. If a descriptive averment in the indictment for
the greater offense is identical to an element of the lesser offense, or if an
element of the lesser offense may be deduced from a descriptive averment in the
indictment for the greater-inclusive offense, this should be factored into the
lesser-included-offense analysis in asking whether all of the elements of the
lesser offense are contained within the allegations of the greater offense. Id.
Burgess urges us to consider his testimony about touching the girls’ hips in
deciding whether he was entitled to a lesser-included instruction. But in the first
step of our analysis, we do not look to the facts presented at trial; rather, we look
7
to the evidence legally required to prove the elements of the charged offenses.
See Tex. Code Crim. Proc. Ann. art. 37.09(1); State v. Meru, No. PD-1635-12,
2013 WL 6182420, at *3 (Tex. Crim. App. Nov. 27, 2013) (―The first step of the
analysis is a question of law that does not depend on the evidence presented at
trial.‖); McKithan v. State, 324 S.W.3d 582, 593 (Tex. Crim. App. 2010) (―The
relevant inquiry is not what the evidence may show but what the State is required
to prove to establish the charged offense.‖).
Assault by contact, which Burgess contends is a lesser-included offense
here, requires that the defendant knew or reasonably believed that the
complainant would regard the contact as offensive or provocative. Tex. Penal
Code Ann. § 22.01(a)(3) (West Supp. 2013). None of the charged offenses, as
alleged, requires such proof. In other words, proof that Burgess knew the girls
would be offended by his touching, or would find the touching provocative, is not
required to prove continuous sexual assault of young children, aggravated sexual
assault, or indecency with a child. See id. §§ 21.02, 21.11, § 22.021 (West 2011
& Supp. 2013). Because this additional fact must be proved for assault by
contact but not for the charged offenses, assault by contact is not a lesser-
included offense under article 37.09(1).3 See Tex. Code Crim. Proc. Ann. art.
3
And because the first part of the lesser-included-offense instruction
analysis is not satisfied, we do not need to reach the second part of the
analysis—whether some evidence exists in the record that if Burgess is guilty, he
is guilty only of the lesser offense. See Hall, 225 S.W.3d at 528; Rousseau, 855
S.W.2d at 672–73.
8
37.09(1); McKithan, 324 S.W.3d at 583; Watson, 306 S.W.3d at 273; see also
Lopez v. State, No. 13-09-00523-CR, 2012 WL 256103, at *7 (Tex. App.—
Corpus Christi Jan. 26, 2012, no pet.) (mem. op., not designated for publication)
(holding that assault by contact is not a lesser-included offense of aggravated
sexual assault); Silber v. State, No. 13-05-00238-CR, 2006 WL 347167, at *2–3
(Tex. App.—Corpus Christi Feb. 16, 2006, pet. ref’d) (mem. op., not designated
for publication) (holding that assault by contact is not a lesser-included offense of
indecency with a child); Shea v. State, 167 S.W.3d 98, 106 (Tex. App.—Waco
2005, pet. ref’d) (holding that assault by contact is not a lesser-included offense
of indecency with a child); Ramos v. State, 981 S.W.2d 700, 701 (Tex. App.—
Houston [1st Dist.] 1998, pet. ref’d) (holding that assault by contact is not a
lesser-included offense of aggravated sexual assault or indecency with a child).
Because assault by contact is not a lesser-included offense in this case,
the trial court did not err by refusing Burgess’s request for a jury instruction. See
Tex. Code Crim. Proc. Ann. art. 37.09; Watson, 306 S.W.3d at 273. We overrule
Burgess’s second issue.
V. TESTIMONY OF RECENT ALLEGATION
In his third issue, Burgess complains that the trial court abused its
discretion by admitting evidence of the extraneous act of his playing ―strip
Connect 4‖ with Kelsey. He contends that because the State failed to provide
him with adequate notice of its intent to introduce the extraneous act, the trial
court should have excluded the evidence.
9
Article 38.37, section 3 of the code of criminal procedure provides that a
defendant who requests notice of the State’s intent to introduce extraneous acts
during the State’s case-in-chief is entitled to notice ―in the same manner as the
state is required to give notice under Rule 404(b).‖ Act of May 24, 2005, 79th
Leg., R.S., ch. 728, § 4.004, 2005 Tex. Gen. Laws 2188, 2192 (amended 2013)
(current version at Tex. Code Crim. Proc. Ann. art. 38.37, § 3 (West Supp.
2013)). Rule 404(b) requires that the State ―give reasonable notice in advance of
trial.‖ Tex. R. Evid. 404(b). ―The purpose behind the notice provision is to
adequately make known to the defendant the extraneous [acts] the State intends
to introduce at trial and to prevent surprise to the defendant.‖ Martin v. State,
176 S.W.3d 887, 900 (Tex. App.—Fort Worth 2005, no pet.). We review a trial
court’s ruling as to the admissibility of extraneous acts under an abuse-of-
discretion standard. See Mitchell v. State, 931 S.W.2d 950, 953 (Tex. Crim. App.
1996).
Here, Burgess objected to Kelsey’s testimony that she played strip
Connect 4 with Burgess, arguing that the State did not provide him with timely
notice under article 38.37,4 but he did not request a continuance. By not
requesting a continuance, Burgess did not preserve the issue he urges on appeal
on the basis of surprise. See Martines v. State, 371 S.W.3d 232, 249 (Tex.
App.—Houston [1st Dist.] 2011, no pet.); Martin, 176 S.W.3d at 900; Koffel v.
4
Kelsey did not inform the State about the game until the day before trial
began.
10
State, 710 S.W.2d 796, 802 (Tex. App.—Fort Worth 1986, pet. ref’d) (citing
Lindley v. State, 635 S.W.2d 541, 544 (Tex. Crim. App. [Panel Op.] 1982)).
Even assuming, without deciding, both that Burgess preserved error and
that the trial court abused its discretion by overruling his objection regarding the
timeliness of the notice, the record does not demonstrate that Burgess suffered
harm. The erroneous admission of an extraneous act is a nonconstitutional
error, meaning that the error is reversible only if the appellant’s substantial rights
were affected by not receiving timely notice. See Tex. R. App. P. 44.2(b);
McDonald v. State, 179 S.W.3d 571, 578 (Tex. Crim. App. 2005). The record
does not suggest that Burgess’s trial strategy would have changed if he had
received advanced notice that the State intended to introduce evidence of the
Connect 4 game. When prosecutors met with Kelsey in the week before trial,
she could not remember Burgess touching her sex organ or chest area. The
State provided Burgess with advanced notice of the information prosecutors
obtained during the meeting with Kelsey. On cross-examination of Kelsey,
Burgess drew attention to the discrepancy, asking her why she could not recall
the touching in her meeting with prosecutors but could remember it at trial.
Similarly, when questioning Kelsey about the Connect 4 game, Burgess drew
attention to the discrepancy. He asked her about testifying at trial to the details
of a game that she never mentioned to anyone until the day before trial. Burgess
does not explain on appeal how his defense strategy would have differed had he
received notice of the Connect 4 evidence. Without any explanation from
11
Burgess, we cannot determine that his trial strategy was adversely affected,
much less substantially and injuriously affected, by a lack of notice, especially in
light of his cross-examination of Kelsey on the issue. See McDonald, 179
S.W.3d at 578–79; Martines, 371 S.W.3d at 249–50.
We overrule Burgess’s third issue.
VI. OUTCRY TESTIMONY
In his fourth issue, Burgess complains that the trial court abused its
discretion by permitting the State to designate Rebecca Truette, the family
services coordinator who interviewed Amber and Kelsey at the Children’s
Advocacy Center, as its outcry witness. Burgess contends that Sarah was the
proper outcry witness because she was the first person over eighteen years of
age to whom the girls told about Burgess’s misconduct.
In pertinent part, article 38.072 of the code of criminal procedure allows for
hearsay testimony to be admitted as substantive evidence in the prosecution of
sexual offenses committed against children under the age of fourteen, provided
that the witness was the first person, other than the defendant and who was age
eighteen or older, to whom the children made a statement about the offense.
Tex. Code Crim. Proc. Ann. art. 38.072, §§ 1(1), 2 (West Supp. 2013); Duran v.
State, 163 S.W.3d 253, 257 (Tex. App.—Fort Worth 2005, no pet.). The term
―statement about the offense‖ means ―more than words which give a general
allusion‖ of sexual abuse; rather, it means ―a statement that in some discernible
manner describes the alleged offense.‖ Garcia v. State, 792 S.W.2d 88, 91 (Tex.
12
Crim. App. 1990). A trial court has broad discretion in determining the proper
outcry witness, and we will not reverse the trial court absent an abuse of that
discretion. Id. at 92.
At trial, Sarah testified that before she took the girls to the Advocacy
Center, she asked them, individually, if ―anything bad‖ was happening to them.
Amber said that Burgess ―had been touching her private areas and that he made
her touch his as well.‖ Kelsey simply said that Burgess had been touching her.
Sarah testified that each of these conversations lasted two or three minutes.
Sarah did not press the girls for details, nor did the girls provide her with any
details.5 Sarah then took the girls to the Advocacy Center, where each girl gave
a detailed account to Truette.
Because article 38.072 demands more than a general allusion of sexual
abuse, we conclude that the trial court did not abuse its discretion by determining
that Truette, not Sarah, was the proper person to testify as an outcry witness.
See Tex. Code Crim. Proc. Ann. art. 38.072; Garcia, 792 S.W.2d at 91–92.
Truette was the first person over eighteen years of age to whom the girls
provided a detailed account of their encounters with Burgess. See Smith v.
State, 131 S.W.3d 928, 930–31 (Tex. App.—Eastland 2004, pet. ref’d) (holding
that trial court did not abuse its discretion by ruling that counselor at child
5
When asked why she did not press the girls for details, Sarah responded:
―I didn’t want to know the details really, first of all. And I just wanted to ask each
of them separately to make sure that what they were saying, you know, was the
truth. And I don’t know, I didn’t want to know what they said.‖
13
advocacy center was proper outcry witness when child first told mother and
doctor that child had been performing oral sex on appellant but did not give any
other details); Sims v. State, 12 S.W.3d 499, 500 (Tex. App.—Dallas 1999, pet.
ref’d) (holding that trial court did not abuse its discretion by ruling that mother
was not proper outcry witness when child first told mother that appellant had
been touching child’s ―private parts‖ but did not give any other details); Schuster
v. State, 852 S.W.2d 766, 768 (Tex. App.—Fort Worth 1993, pet. ref’d) (holding
that trial court did not abuse its discretion by ruling that mother was not proper
outcry witness when child first told mother that appellant had touched her but did
not provide any other details). We overrule Burgess’s fourth issue.
VII. VOIR DIRE REMARKS
In his fifth issue, Burgess argues that the trial court erred by not granting a
mistrial sua sponte during voir dire based on remarks from the State.
During voir dire, a prospective juror asked the prosecutor why he chose to
specialize in crimes against children. The prosecutor responded:
Well, when you deal with drug dealers, you deal with robbers,
people like that. There are always circumstances where maybe
they’ve had a—grew up in a poor neighborhood, maybe they had a
bad family life. Unfortunately, some of the murder cases I’ve tried
are, you know, a husband is cheating on his wife and his wife, you
know, kills him.
I mean, I’m not saying it’s okay. But I’m just saying a lot of
people we deal with aren’t the savoriest of characters. And in my
mind there’s just—there’s nothing worse than hurting a child. So
that’s why I do these cases, because I think they’re the worst
criminals.
14
Burgess did not object to these remarks and, consequently, did not
preserve his complaint for review. See Tex. R. App. P. 33.1(a)(1) (requiring a
timely request, objection, or motion stating the specific grounds for the desired
ruling to preserve a complaint for review); Clark v. State, 365 S.W.3d 333, 339
(Tex. Crim. App. 2012); see also Espinosa v. State, 194 S.W.3d 703, 708 (Tex.
App.—Houston [14th Dist.] 2006, no pet.) (―When appellant complains about an
improper remark by the prosecutor during voir dire, appellant must object when
the remark is made.‖).
Without an objection at trial, Burgess argues that the trial court should
have granted a mistrial sua sponte because the prosecutor’s remarks were so
inflammatory that they deprived him of his constitutional right to a fair trial. But a
trial court has the power to declare a mistrial sua sponte only when manifest
necessity exists. See Torres v. State, 614 S.W.2d 436, 442–43 (Tex. Crim. App.
[Panel Op.] 1981). Here, the prosecutor’s general statements about those who
commit crimes against children do not rise to the level of manifest necessity for a
mistrial. See Hill v. State, 90 S.W.3d 308, 313 (Tex. Crim. App. 2002) (―Manifest
necessity exists when the circumstances render it impossible to arrive at a fair
verdict, when it is impossible to continue with trial, or when the verdict would be
automatically reversed on appeal because of trial error.‖); Torres, 614 S.W.2d at
442 (―The power ought to be used with the greatest caution, under urgent
circumstances, and for very plain and obvious causes.‖) (quoting U.S. v. Perez,
22 U.S. 579, 580 (1824)). See generally Brown v. State, 907 S.W.2d 835, 839–
15
40 (Tex. Crim. App. 1995) (reviewing cases in which the court held that manifest
necessity did not exist). We overrule Burgess’s fifth issue.
IIX. SUPPRESSION OF ORAL STATEMENTS
In his sixth issue, Burgess complains that the trial court erred by denying
his motion to suppress evidence of his interview with police because it was
obtained in violation of Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602 (1966).
The State may not use a defendant’s statements, whether exculpatory or
inculpatory, stemming from a custodial interrogation unless it demonstrates the
use of procedural safeguards effective to secure the privilege against self-
incrimination. Id. at 444, 86 S. Ct. at 1612. Article 38.22 of the code of criminal
procedure also precludes the use of statements that result from a custodial
interrogation without compliance with its procedural safeguards. See Tex. Code
Crim. Proc. Ann. art. 38.22 (West Supp. 2013). Before an investigation reaches
the accusatorial or custodial stage, a person’s Fifth Amendment rights have not
come into play, and the voluntariness in waiving those rights is not implicated.
Melton v. State, 790 S.W.2d 322, 326 (Tex. Crim. App. 1990).
There are at least four general situations where a suspect’s detention may
constitute custody: (1) when the suspect is physically deprived of his freedom of
action in any significant way, (2) when a law enforcement officer tells the suspect
that he cannot leave, (3) when law enforcement creates a situation that would
lead a reasonable person to believe that his freedom of movement has been
significantly restricted, and (4) when there is probable cause to arrest and law
16
enforcement officers do not tell the suspect that he is free to leave. Dowthitt v.
State, 931 S.W.2d 244, 255 (Tex. Crim. App. 1996); McCulley v. State, 352
S.W.3d 107, 115–16 (Tex. App.—Fort Worth 2011, pet. ref’d). In the first three
situations, the restriction on freedom of movement must amount to a degree
associated with arrest rather than investigative detention. Dowthitt, 931 S.W.2d
at 255; McCulley, 352 S.W.3d at 116.
Because a trial court’s custody determination presents a mixed question of
law and fact, we give almost total deference to the trial court’s ruling when the
questions of fact turn on an evaluation of credibility and demeanor. Herrera v.
State, 241 S.W.3d 520, 526–27 (Tex. Crim. App. 2007); Amador v. State, 221
S.W.3d 666, 673 (Tex. Crim. App. 2007); Johnson v. State, 68 S.W.3d 644, 652–
53 (Tex. Crim. App. 2002). But when application-of-law-to-fact questions do not
turn on the credibility and demeanor of the witnesses, we review the trial court’s
rulings on those questions de novo. Amador, 221 S.W.3d at 673; Estrada v.
State, 154 S.W.3d 604, 607 (Tex. Crim. App. 2005); Johnson, 68 S.W.3d at 652–
53. Additionally, when, as here, the record is silent on the reasons for the trial
court’s ruling, or when there are no explicit fact findings and neither party timely
requested findings and conclusions from the trial court, we imply the necessary
fact findings that would support the trial court’s ruling if the evidence, viewed in
the light most favorable to the trial court’s ruling, supports those findings. State
v. Garcia-Cantu, 253 S.W.3d 236, 241 (Tex. Crim. App. 2008); Herrera, 241
S.W.3d at 527; see Wiede v. State, 214 S.W.3d 17, 25 (Tex. Crim. App. 2007).
17
We then review the trial court’s legal ruling de novo unless the implied fact
findings supported by the record are also dispositive of the legal ruling. State v.
Kelly, 204 S.W.3d 808, 819 (Tex. Crim. App. 2006).
Here, Burgess complains about the admission of a recorded interview he
had with Arlington police nearly a month before a warrant was issued for his
arrest. Detective Donna Hubbard of the Arlington Police Department was in
charge of Burgess’s investigation. Early one morning, she telephoned Burgess
to ask if he wanted to come to her office to discuss the allegations made against
him. Burgess responded that he wanted to come in immediately. Detective
Hubbard knew that her partner, Detective Debbie Stansell, would have to drive
from Frisco to Arlington to attend the interview, so she scheduled the interview
for early that afternoon.
Detective Hubbard worked out of the Alliance for Children office in
Arlington. All guests to the Alliance office had to be ―buzzed into‖ the building.
When Burgess arrived for his interview, he was buzzed in, and Detective
Hubbard met him in the building’s lobby. She then showed him to the second-
floor interview room. In the interview room, Detective Stansell joined Detective
Hubbard and Burgess.
The detectives interviewed Burgess for approximately ninety minutes.
Neither detective advised him of his Miranda rights. At the conclusion of the
interview, he left both the room and the building without being buzzed out. Nine
days after the interview at Alliance, Detective Hubbard interviewed Burgess
18
again at another location. Twenty-nine days after his interview at Alliance, she
obtained a warrant for his arrest.
On appeal, Burgess complains that during the interview at Alliance, he was
in custody for Miranda purposes because (1) he had to be buzzed into the
building and (2) the interview room ―look[ed] like any other room where
statements are taken when a person is in custody.‖ But these facts do not
transform Burgess’s interview into a custodial interrogation. The court of criminal
appeals has held that these types of voluntary stationhouse interviews are non-
custodial:
Where a person voluntarily accompanies police officers, who are
then only in the process of investigating a crime, to a certain
location, and he knows or should know that the police officers
suspect he may have committed or may be implicated in committing
the crime, we are unable to hold that under the circumstances such
a person is restrained of his freedom of movement. Under those
circumstances, he is not in custody.
Dancy v. State, 728 S.W.2d 772, 778–79 (Tex. Crim. App.), cert. denied, 484
U.S. 975 (1987); see also Oregon v. Mathiason, 429 U.S. 492, 494–95, 97 S. Ct.
711, 713–14 (1977) (holding defendant’s freedom not restricted in any way when
defendant voluntarily met detective for interview at state patrol office); Estrada v.
State, 313 S.W.3d 274, 294–95 (Tex. Crim. App. 2010) (holding defendant was
not in custody when he voluntarily submitted to questioning and was in interview
room at police station for five hours), cert. denied, 131 S. Ct. 905 (2011);
Dowthitt, 931 S.W.2d at 255 (―Stationhouse questioning does not, in and of itself,
constitute custody.‖). The fact that Burgess had to be buzzed into the building
19
does not change our analysis. See Frame v. State, No. 02-05-00097-CR, 2006
WL 3627155, at *5–6 (Tex. App.—Fort Worth Dec. 14, 2006, pet. ref’d) (mem.
op., not designated for publication) (holding that defendant was not in custody
when she voluntarily went to police station for interview and was escorted to
interrogation room in restricted area); Scott v. State, 165 S.W.3d 27, 42–43 & n.6
(Tex. App.—Austin 2005) (holding that defendant was not in custody where
police questioned him in a ―secure area where the interview room was located‖),
rev’d on other grounds, 227 S.W.3d 670 (Tex. Crim. App. 2007). Thus, the
record supports the trial court’s implied finding that Burgess was not in custody
during his interview at the Alliance office. See Dancy, 728 S.W.2d at 778.
Because he was not in custody, his Fifth Amendment rights had not yet come
into play and the voluntariness of his statement is not implicated. See Melton,
790 S.W.2d at 326. We overrule Burgess’s sixth issue.
IX. CONCLUSION
Having overruled Burgess’s six issues, we affirm the trial court’s judgment.
SUE WALKER
JUSTICE
PANEL: GARDNER, WALKER, and MEIER, JJ.
DO NOT PUBLISH
Tex. R. App. P. 47.2(b)
DELIVERED: January 9, 2014
20
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NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS AUG 15 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
AYODELE AKINOLA, No. 14-15302
Plaintiff-Appellant, D.C. No. 3:11-cv-00681-LRH-
WGC
v.
DAVID SEVERNS, MEMORANDUM*
Defendant-Appellee.
Appeal from the United States District Court
for the District of Nevada
Larry R. Hicks, District Judge, Presiding
Submitted August 9, 2017**
Before: SCHROEDER, TASHIMA, and M. SMITH, Circuit Judges.
Ayodele Akinola appeals pro se from the district court’s order dismissing
certain claims in his 42 U.S.C. § 1983 action alleging race discrimination in his
employment with the State of Nevada’s Department of Transportation. We have
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
jurisdiction under 28 U.S.C. § 1291.1 We review de novo a dismissal for failure to
state a claim under Federal Rule of Civil Procedure 12(b)(6). Lacey v. Maricopa
County, 693 F.3d 896, 911 (9th Cir. 2012) (en banc). We affirm.
The district court properly dismissed Akinola’s Fourteenth Amendment
equal protection claim based on a hostile work environment theory because
Akinola failed to allege facts sufficient to show conduct severe or pervasive
enough to alter the terms or conditions of his employment. See Manatt v. Bank of
Am., NA, 339 F.3d 792, 798-99 (9th Cir. 2003) (setting forth elements of a hostile
work environment claim).
After considering Akinola’s response to the Order to Show Cause Re: Case
Dismissal (Docket Entry No. 41), we decline to consider Akinola’s First
Amendment retaliation claim because this court already considered this claim in
Case No. 15-16066. Akinola v. Severns, --- Fed. App’x ----, 2017 WL 1089547, at
*1 (9th Cir. Mar. 23, 2017).
We do not consider matters not specifically and distinctly raised and argued
in the opening brief. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009).
1
After considering the parties’ responses to the Order to Show Cause Re:
Jurisdiction (Docket Entry No. 30), we are satisfied that we have jurisdiction.
2 14-15302
Akinola’s motion for leave to file a late letter brief (Docket Entry No. 38) is
granted. The Clerk shall file the letter brief submitted by Akinola on March 1,
2017 (Docket Entry No. 36).
AFFIRMED.
3 14-15302
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405 F.Supp.2d 852 (2005)
UNITED STATES of America, Plaintiff
v.
Eloy PEREZ, Defendant.
No. 3:05 CR 772.
United States District Court, N.D. Ohio, Western Division.
December 22, 2005.
*853 Thomas P. Weldon, Office of the U.S. Attorney, Toledo, OH, for Plaintiff United States of America.
Donna M. Grill, Jack J. Brady, Brady, Coyle & Schmidt, Vedo Robert Candiello, Law Offices of Vedo R. Candiello, Toledo, OH, for Defendants Eloy P. Perez.
ORDER
CARR, Chief Judge.
This is a criminal case in which the defendant has filed two motions to dismiss and a motion to suppress. For the reasons that follow, the motions to dismiss shall be overruled and the motion to suppress shall be scheduled for a hearing on the issue of the lawfulness of an alleged warrantless entry; the motion to suppress shall otherwise be overruled.
*854 A. Motion to Suppress
The defendant is charged with unlawful possession of firearms. Toledo, Ohio, police officers found the weapons while executing a search warrant at the defendant's residence.
1. Unlawful Entry
The defendant claims that the warrant was based on observations made during an unlawful entry into the residence. According to the defendant, he had been arrested on the porch of his house, then forced to enter into the residence with the officers, who conducted a search of the premises. Based on what they saw, the officers sought and obtained a search warrant, which they later executed.
The defendant's motion to suppress demands a Franks hearing. Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978). On review of the motion and its allegations, I agree with the government that, thus far, no adequate basis has been shown that the affiant made deliberately false or recklessly misleading statements. Id. at 156-57, 98 S.Ct. 2674.
But, in view of the defendant's contentions that information contained in the warrant resulted from an unlawful entry and search, I conclude that a hearing is necessary to determine the circumstances under which an initial, pre-warrant search occurred, whether such search was lawful, and, if not, whether information gained from that search was material to the probable cause allegations in the affidavit.
2. Probable Cause
The defendant contends that the showing of probable cause in the affidavit was insufficient, as well as tainted by the observations during the initial search. If the initial search was lawful, the information obtained during that search sufficed to show probable cause.
The officers claimed they smelled marijuana. The defendant disputes their ability to do so, but that is not a sufficient basis for finding that they did not do so, or holding a Franks hearing. Id. at 171, 98 S.Ct. 2674. A smell of marijuana provides probable cause to believe that marijuana is at hand. United States v. Koger, 152 Fed. Appx. 429, 430-31, 2005 WL 2293480, *2 (6th Cir.2005); United States v. Foster, 376 F.3d 577, 588 (6th Cir.2004).
The defendant claims that the affiant had no basis for his contention that the defendant's installation of a video monitoring system was suggestive of drug trafficking. The mere conclusory statement of an officer does not make that statement false, or give rise to a Franks hearing. Franks, 438 U.S. at 171, 98 S.Ct. 2674 (holding that conclusory statements are not grounds for challenging the veracity of an affidavit because "the challenger's attack must be more than conclusory"); see also Ornelas v. United States, 517 U.S. 690, 699, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996) (stating that "a police officer may draw inferences based on his own experience in deciding whether probable cause exists"). In any event, there is nothing so inherently implausible in that assertion that casts doubt on the probable cause showing in the affidavit.
3. Failure to Make a Return
The defendant claims that the officers never made a return on the warrant, as required by Ohio R.Crim. P. 41. The government does not contest this allegation.
Suppression is generally available only for violations of the Fourth Amendment. United States v. Ware, 161 F.3d 414, 424-25 (6th Cir.1998) (stating that "[s]tatutory violations, absent any underlying constitutional violations or rights, are generally insufficient to justify imposition of the exclusionary *855 rule"); United States v. Chaar, 137 F.3d 359, 361 (6th Cir.1998). The violation alleged here is of a state rule of criminal procedure. Such rule, moreover, relates to events that happened after the search and seizure had been completed. Any noncompliance with the requirement that the officers return the warrant to the court and file it and an inventory did not affect any of the privacy interests protected by the Fourth Amendment.
Violation of Rule 41 of the Federal Rules of Criminal Procedure does not give rise to suppression. Ware, 161 F.3d at 424-25. That being so, there is no basis for suppression in this federal proceeding on the basis of a violation of a state rule of procedure.
B. Motions to Dismiss.
In his motions to dismiss, the defendant alleges: 1) prejudicial delay in the return of the indictment; and 2) lack of a chain of custody re: the post-seizure handling of the guns found in the defendant's premises.
1. Pre-Indictment Delay
The defendant claims that the indictment in this case was returned about six months after the search that uncovered the firearms. In the interim, he alleges, the owner of the firearms has left Toledo and is not available as a witness. His testimony, he suggests, would be exculpatory.
To obtain dismissal of an indictment on the basis of pre-indictment delay, a defendant must show that the delay was "an intentional device to gain tactical advantage" and the delay resulted in substantial prejudice. United States v. Marion, 404 U.S. 307, 334, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971).
Investigative delay is "fundamentally" different than delay to gain tactical advantage. United States v. Lovasco, 431 U.S. 783, 97 S.Ct. 2044, 52 L.Ed.2d 752 (1977); United States v. Atisha, 804 F.2d 920, 926 (6th Cir.1986) (stating that investigative delay does not deprive a defendant of due process, even if defendant is slightly prejudiced by delay); see also United States v. Rogers, 118 F.3d 466, 477 (6th Cir.1997) (permitting a delay of two years even though co-defendant and possible exculpatory witness had died in the intervening time).
The delay here was so that government officers with the ATF could investigate the case. The defendant has presented no evidence that the purpose of the delay was to gain tactical advantage.
Even more, the defendant cannot show that the delay substantially prejudiced him. A subpoena to compel the attendance of a witness can be served anywhere in the country. Fed.R.Crim.P. 17(a), (e) (describing the procedure for compelling attendance of a witness at a criminal trial); see also State v. Rice, 1991 WL 97412, at *8 (same, only for Ohio state courts). Thus, the departure of the alleged owner does not mean that he cannot be caused to appear for trial.
Even if the putative owner could not be located, or if located and appeared [or brought before the court], would not testify, that does not cause prejudice to the defendant. Possession, not ownership is the gravamen of the offenses with which he stands charged. One may possess a firearm regardless of its ownership. United States v. DeJohn, 368 F.3d 533, 545 (6th Cir.2004), United States v. Bonds, 983 F.2d 1069, 1992 WL 393063 (6th Cir.1992). It is no defense to a charge of unlawful possession of a firearm that the weapon belonged to someone else. DeJohn, 368 F.3d at 545 (stating that "[o]ne may possess a firearm regardless of its ownership").
*856 Thus, any delay in the indictment's return, even if it could be viewed as unreasonable [which is not, in my view, the case], could not have caused the prejudice that the defendant attributes to such delay. He is not, accordingly, entitled to dismissal of the indictment on the basis of pre-indictment delay.
2. Chain of Custody
The defendant contends that alleged defects in the chain of custody in the handling of the firearms justify dismissing the indictment.
Chain of custody is an evidentiary issue. United States v. Levy, 904 F.2d 1026, 1030 (6th Cir.1990). Evidence is admissible even if gaps in the chain exist. United States v. Kinnard, 968 F.2d 1216, 1992 WL 162558, *3 (6th Cir.1992). Such gaps, if shown and not explained, go to weight, not admissibility. Levy, 904 F.2d at 1030.
The defendant has not cited, and this court is not aware of any case or cases holding that a possible inability to construct a seamless chain of custody entitles a defendant to dismissal before the government has offered its proof.
The defendant's motion to dismiss on the basis of anticipated chain of custody problems shall be overruled.
Conclusion
For the foregoing reasons, it is
ORDERED THAT:
1. The defendant's motions to dismiss be, and the same hereby are overruled; and
2. The defendant's motion to suppress is overruled with regard to all his claims except claim that the warrant was procured on the basis of information obtained during an unlawful entry into his residence; the Clerk shall set that issue for an evidentiary hearing forthwith.
So ordered.
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Order Michigan Supreme Court
Lansing, Michigan
March 27, 2019 Bridget M. McCormack,
Chief Justice
David F. Viviano,
Chief Justice Pro Tem
158444 & (16)
Stephen J. Markman
Brian K. Zahra
PEOPLE OF THE STATE OF MICHIGAN, Richard H. Bernstein
Plaintiff-Appellee, Elizabeth T. Clement
Megan K. Cavanagh,
Justices
v SC: 158444
COA: 343823
Muskegon CC: 13-062982-FC
JIMARIO DEJUAN SULLIVAN,
Defendant-Appellant.
_________________________________________/
On order of the Court, the application for leave to appeal the August 9, 2018 order
of the Court of Appeals is considered, and it is DENIED, because the defendant has
failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). The
motion to remand is DENIED.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
March 27, 2019
d0320
Clerk
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45 Cal.App.4th 740 (1996)
CITY OF OAKLAND et al., Petitioners,
v.
THE SUPERIOR COURT OF ALAMEDA COUNTY, Respondent; CALIFORNIA BEVERAGE RETAILER COALITION et al., Real Parties in Interest.
Docket No. A068638.
Court of Appeals of California, First District, Division Four.
May 20, 1996.
*746 COUNSEL
Jayne W. Williams, City Attorney, Joyce M. Hicks and Randolph W. Hall, Assistant City Attorneys, Robert J. Graham and Mark P. Wald, Deputy City Attorneys, Siegel, Yee & Jonas and Dan Siegel for Petitioners.
John L. Fellows III, City Attorney, as Amicus Curiae on behalf of Petitioners.
No appearance for Respondent.
Rogers, Joseph, O'Donnell & Quinn, Renee D. Wasserman, Donahue, Gallagher, Woods & Wood and A. Clifford Allen for Real Parties in Interest.
Pillsbury, Madison & Sutro, James M. Seff, Kevin M. Fong and J. Daniel Davis as Amici Curiae on behalf of Real Parties in Interest.
OPINION
REARDON, J.
Many California cities must grapple with nuisances associated with alcoholic beverage sale establishments. Some local entities have *747 adopted ordinances to identify those activities associated with alcoholic beverage sales that constitute nuisances and to eliminate their attendant threat to the public health and welfare by means of an administrative process. The proprietors of alcoholic beverage sale establishments challenge these ordinances, arguing that they trod on the state's exclusive right to regulate and tax alcoholic beverage sales. We hold that a city ordinance addressing nuisance problems associated with alcoholic beverage sale establishments does not improperly regulate preexisting grandfathered[1] licensees or tax licensees for regulatory purposes.
In this case, petitioner City of Oakland (city) enacted an ordinance regulating nuisances associated with alcoholic beverage establishments. Real parties in interest California Beverage Retailer Coalition and Village Market filed an action against the city, seeking a declaratory judgment that the ordinance was invalid, an injunction precluding its enforcement, and monetary damages. The trial court granted summary adjudication on two of six causes of action, concluding that the city ordinance illegally regulated holders of earlier-granted alcoholic beverages licenses and taxed these licensees in violation of state law. (See Cal. Const., art. XX, § 22; Bus. & Prof. Code, § 23790.)[2] The city and others petitioned for a writ of mandate and prohibition, seeking to compel the trial court to vacate its summary adjudication order and enter an order denying the motion for summary adjudication. We issued an alternative writ and now grant the city's petition.
I. FACTS
In July 1993, petitioner city enacted an ordinance as a one-year pilot program to address public nuisance problems associated with certain alcoholic beverage sale establishments in specified areas of the city. (See Oakland Planning Code, §§ 15000-15530 [Ord. No. 11624].) Under the ordinance, the sale of alcoholic beverages in the city is deemed to be an approved commercial activity as long as the merchant complies with the city's "Deemed Approved Performance Standards."[3] Each merchant must post a notice of these standards. (Id., § 15320.) If the city receives a *748 complaint that these standards have been violated, an administrative hearing must be conducted to review the complaint. (Id. § 15340.) The hearing officer must determine if the merchant has conformed to the performance standards and, if the merchant has not, may impose conditions on the use of the property to ensure compliance. (Ibid.) If the merchant fails to comply with these conditions, the deemed approved status may be revoked. (Id. § 15350.) Once administrative appeals to the planning commission and city council are exhausted, the city may seek to have the activity abated as a nuisance. (Id. §§ 15360-15370, 15510(c).) The city may also refer the matter to the Department of Alcoholic Beverage Control for revocation of the merchant's liquor license. (See Bus. & Prof. Code, §§ 24200-24211.) To support the pilot project, most alcoholic beverage sale licensees within the city will be assessed a $600 fee. An additional $200 reinspection fee may be imposed on an estimated 10 percent of the alcoholic beverage establishments covered by the ordinance.[4] (Oakland Planning Code, §§ 15400, 15510(f).)
In November 1993, real parties in interest California Beverage Retailer Coalition and Village Market and others[5] filed a complaint against the city, seeking declaratory and injunctive relief and damages. The complaint alleged that the ordinance was preempted by state law, violated due process and equal protection, and infringed civil rights. It also sought a preliminary injunction to preclude enforcement of the ordinance pending trial on the merits of the complaint. In December 1993, petitioner Coalition on Alcohol *749 Outlet Issues[6] was granted leave to intervene and filed a complaint in intervention in this matter. At the hearing on the motion for preliminary injunction, the trial court found that the ordinance was preempted by state law and that the restrictions and conditions imposed by the ordinance were impermissibly retroactive. The trial court granted the preliminary injunction later that month, barring enforcement of the ordinance. The city and CAOI appealed. In September 1994, we reversed the order granting the preliminary injunction, finding that there was no clear and imminent danger of irreparable harm. (See California Beverage Retailer Coalition v. City of Oakland (Sept. 20, 1994) A064898 [nonpub. opn.].)[7]
In November 1994, CBRC filed its second amended complaint. It alleged six causes of action preemption by article XX of the California Constitution, violation of section 23790, unlawful taxation in violation of article XX of the California Constitution, and violations of due process, equal protection and civil rights. CBRC also moved for summary adjudication on the second and third causes of action alleging improper regulation in violation of section 23790 and unlawful taxation in violation of the state Constitution. The city and CAOI opposed the motion, but it was granted by the trial court.
In January 1995, the trial court filed its order granting summary adjudication on these two causes of action. It found no triable issue of fact existed on these causes of action and ruled in CBRC's favor on the law. It concluded that the ordinance was preempted by section 23790 because it regulates previously existing licensees. It also found that the fees required by the ordinance were illegal because the power to regulate and tax alcoholic beverages belongs exclusively to the state. Its order anticipated trial on the unresolved matters in this case.
The city petitioned this court for a writ of mandate or prohibition. The city argues that the trial court erred as a matter of law in concluding that the ordinance was preempted by state law. It seeks either a peremptory writ of mandate directing the trial court to vacate and set aside its order granting summary adjudication and entering a denial order instead, or an alternative writ directing the trial court to show cause why it should not be so directed. In January 1996, we issued an alternative writ.
*750 II. MANDATE[8]
(1a) First, we must determine whether we may review the order granting summary adjudication on a petition for writ of mandate. A writ of mandate may be issued by any court to an inferior tribunal to compel the admission of a party to the use or enjoyment of a right to which it is entitled and from which it is unlawfully precluded by the inferior tribunal. (Code Civ. Proc., § 1085.) Typically, the writ will not issue if there is a plain, speedy and adequate remedy in the ordinary course of law. (Id. § 1086.)
An order granting partial summary judgment or summary adjudication is not an appealable order. Mandate may be granted to review an order granting summary adjudication. (See Field Research Corp. v. Superior Court (1969) 71 Cal.2d 110, 111 [77 Cal. Rptr. 243, 453 P.2d 747]; Mason v. Superior Court (1985) 163 Cal. App.3d 989, 994 [210 Cal. Rptr. 63]; see 8 Witkin, Cal. Procedure (3d ed. 1985) Extraordinary Writs, § 98, pp. 737-738.)
There is not yet a final judgment in this case, as the trial court has ruled on only two of six causes of action. (2) In most cases, an interim order must await review on appeal from the final judgment. However, in cases of significant legal impact, appellate courts may consider a petition for an extraordinary writ. The adequacy of an appellate remedy depends on the circumstances of the case, vesting a large measure of discretion in the appellate court to grant or deny a writ. (San Gabriel Tribune v. Superior Court (1983) 143 Cal. App.3d 762, 770 [192 Cal. Rptr. 415].)
(1b) Several factors cause us to exercise our discretion and consider the merits of the petition at this time. First, the issues in this case present significant legal questions of constitutional and statutory interpretation. If the court permits CBRC to go to trial based on erroneous rulings of law, substantial trial expenses will be needlessly imposed on the city and the public. (See, e.g., San Diego Unified Port Dist. v. Superior Court (1977) 67 Cal. App.3d 361, 364-365 [136 Cal. Rptr. 557].) This factor tends to make later review on appeal an inadequate remedy. (City of Glendale v. Superior Court (1993) 18 Cal. App.4th 1768, 1776-1777 [23 Cal. Rptr.2d 305]; see Hampton v. Superior Court (1952) 38 Cal.2d 652, 657 [242 P.2d 1] [prohibition]; Bricklayers & Masons Union No. 1 v. Superior Court (1963) 216 Cal. App.2d 578, 582 [31 Cal. Rptr. 115] [prohibition]; see also 8 Witkin, *751 Cal. Procedure, supra, Extraordinary Writs, §§ 101, 116, at pp. 739-740, 751-753.)
Second, the public interest supports an immediate review of the trial court's ruling. When the validity of a public agency's action is at issue, the public interest in a speedy determination of the matter may also make an appeal inadequate. (See Millbrae School Dist. v. Superior Court (1989) 209 Cal. App.3d 1494, 1496-1497 [261 Cal. Rptr. 409].) A number of municipalities have ordinances similar to the one challenged by CBRC or are interested in adopting one. The issues presented in this action are of significance to other California communities struggling with similar nuisances and criminal activity centering on establishments that sell alcoholic beverages.[9] (See, e.g., City of Glendale v. Superior Court, supra, 18 Cal. App.4th at p. 1777.) The fact that it is in the public interest to resolve this controversy as expeditiously as possible tends to weigh in favor of the exercise of our discretion to consider the petition for writ of mandate, rather than requiring the city to await a later appeal. (See City of Huntington Beach v. Superior Court (1978) 78 Cal. App.3d 333, 339-340 [144 Cal. Rptr. 236] [error in liability portion affects scheduled damage trial].)
Third, the issues presented are questions of law, making their immediate resolution on a petition for writ of mandate appropriate. Mandate will lie if the trial court has a clear, present and usually ministerial duty and the city has a clear, present and beneficial right of performance of that duty. However, the city may not invoke mandamus to control a trial court's exercise of discretion. (See Residents for Adequate Water v. Redwood Valley County Water Dist. (1995) 34 Cal. App.4th 1801, 1806 [41 Cal. Rptr.2d 123]; see San Gabriel Tribune v. Superior Court, supra, 143 Cal. App.3d at p. 771.) On a motion for summary adjudication, the trial court has no discretion to exercise. If a triable issue of material fact exists as to the challenged causes of action, the motion must be denied. If there is no triable issue of fact, the motion must be granted. (Code Civ. Proc., § 437c, subd. (f).) If the trial court errs, it has made an error of law, which automatically constitutes an abuse of discretion. Under these circumstances, obtaining relief by means of mandate may be proper. If it appears that the trial court erred, the appellate court may exercise its discretion to entertain the writ in order to avoid unnecessary trial court proceedings. (Whitney's at the Beach v. Superior Court (1970) 3 Cal. App.3d 258, 266 [83 Cal. Rptr. 237].)
*752 If the significant legal issues of statewide interest are resolved in favor of the validity of the city's ordinance, to await a later appeal in order to make this determination would cause needless expense to the city, the CBRC and the public. Thus, we conclude that this is an appropriate matter to be considered on a petition for writ of mandate.
III. STATUTORY CLAIM
A. Section 23790
(3a) The trial court concluded that the Oakland ordinance was preempted by section 23790 because it regulates previously existing licensees. Thus, it granted CBRC summary adjudication on its second cause of action for declaratory and injunctive relief based on its allegation that the Oakland ordinance violated section 23790. In its petition for writ of mandate, the city contends that the trial court erred in granting summary adjudication on this cause of action because it wrongly concluded that the ordinance was preempted. It argues that the trial court based its decision on cases that did not address the specific issue presented in this case. (See Korean American Legal Advocacy Foundation v. City of Los Angeles, supra, 23 Cal. App.4th 376; see also Boccato v. City of Hermosa Beach (1994) 29 Cal. App.4th 1797 [35 Cal. Rptr.2d 282].)
The city frames the issue in this manner does section 23790 preclude it from enforcing an ordinance setting up a new mechanism to control nuisance and criminal activities that were regulated before enactment of this ordinance, if the new mechanism applies to an alcoholic beverage sales establishment in operation before the ordinance was enacted?[10] The ordinance imposes no new regulation on alcoholic beverage sales establishments, it reasons it simply collects various, scattered nuisance and criminal regulations that exist in other laws and creates a new means of enforcing them. Thus, the city reasons, its ordinance is not preempted by section 23790. Amici curiae California cities and towns have filed an amicus curiae brief in support of the city's position. (See fn. 9, ante.) For its part, CBRC contends that the issue is not whether the ordinance is preempted by section 23790, but simply whether this statute precludes a retroactive land use ordinance which interferes with the sale of alcoholic beverages by a licensee. Amici curiae Beer Institute of California, California Beer and Wine Wholesalers *753 Association, Inc., and Wine Institute have filed an amicus curiae brief in support of CBRC's opposition to the petition for writ of mandate.[11]
The pertinent part of section 23790 provides that "[n]o retail license shall be issued for any premises which are located in any territory where the exercise of the rights and privileges conferred by the license is contrary to a valid zoning ordinance of any county or city. Premises which had been used in the exercise of those rights and privileges at a time prior to the effective date of the zoning ordinance may continue operation under the following conditions: [¶] (a) The premises retain the same type of retail liquor license within a license classification. [¶] (b) The licensed premises are operated continuously without substantial change in mode or character of operation...." (Italics added.) This statute was originally enacted in 1935. (Town of Los Gatos v. State Bd. of Equal. (1956) 141 Cal. App.2d 344, 346-347 [296 P.2d 909]; see Stats. 1935, ch. 330, § 15, p. 1130.) It prohibits the issuance of alcoholic beverage retail licenses for any premises located in a zone where the exercise of the rights conferred by that license would violate a valid local zoning ordinance, unless the premises had been used in the exercise of such rights before the effective date of the ordinance. (Board of Trustees v. Munro (1958) 163 Cal. App.2d 440, 447 [329 P.2d 765].)
(4) When reviewing the Oakland ordinance and section 23790, we must interpret both. Thus, the standard of review is one of de novo review. The construction of statutes and the ascertainment of legislative intent are questions of law. We are not limited by the trial court's interpretation, nor by the evidence presented on the issue in the trial court. (See Bravo Vending v. City of Rancho Mirage (1993) 16 Cal. App.4th 383, 391-392 [20 Cal. Rptr.2d 164].)
B. Grandfathered Rights
1. Legislative Argument
(5) Preliminarily, CBRC contends that Oakland's role in the legislative history of section 23790 constitutes an admission that the city ordinance *754 impermissibly regulates grandfathered alcoholic beverage sales establishments.[12] In 1982, the city proposed an amendment to section 23790 providing for the expiration of grandfather rights under certain circumstances. The proposed amendment would have provided for the expiration of grandfather rights when continuous use ended. It would also have distinguished between types of alcoholic beverage licenses when applications were submitted to the Department of Alcoholic Beverage Control to reopen discontinued alcoholic beverage sales establishments. The city's intent was to prevent beer-and-wine-only establishments from being upgraded to full scale liquor stores and retaining the prior owner's grandfather rights. Under the proposed amendment, the premises used in the exercise of an alcoholic beverage license before the enactment of a local zoning ordinance would continue in that operation only if the same type of retail license were used continuously at the same location. In that legislative session, the Legislature enacted a provision defining what constituted a break in the continuous operation of an alcoholic beverage sales establishment. (See § 23790, subd. (b) [now subd. (b)(1)], as amended by Stats. 1982, ch. 474, § 1, p. 2076.)
Oakland officials explained that the purpose of the city's proposed amendment was "an attempt to adjust existing state law to allow the city to control the location of alcoholic beverage sales activities in a more logical and successful manner." In its letter urging the Legislature to amend section 23790, the city's legislative advocate stated that this statute provided that an establishment licensed before the effective date of a zoning ordinance would be unaffected by that zoning ordinance because of the establishment's grandfather rights. The letter added that "the state preempts local jurisdictions in the field of licensing alcoholic beverage establishments." CBRC contends that these 1982 arguments urging amendment of section 23790 contradict the city's claim that this statute does not preclude the application of the Oakland ordinance to grandfathered alcoholic beverage licensees. (See, e.g., California Court Reporters Assn. v. Judicial Council of California (1995) 39 Cal. App.4th 15, 30-31 [46 Cal. Rptr.2d 44] [Judicial Council's earlier requests for legislative authority to enact rules counters present argument that no legislative authority is now needed].)
Having reviewed this matter carefully, we are satisfied that the issues are sufficiently distinct such that the city's previous position does not contradict its contentions in the present case. In 1982, the city advocated a *755 general change in the language of section 23790 defining more clearly what constituted "continuous use" for purposes of determining whether the city had authority to regulate more alcoholic beverage sales establishments. Much of the "argument" that CBRC cites is the city's summary of the then existing law little more than a paraphrase of the text of section 23790. The city and CBRC do not dispute what section 23790 says, but what its language means whether it applies at all in the context presented by this case.
More importantly, the issues presented by the proposed legislation and the case at bar are significantly different. In 1982, the city sought a legislative amendment that would have allowed it more authority to limit the number and location of alcoholic beverage licenses issued within certain zones in the city. In the ordinance now before us, the city attempts to create an administrative mechanism to regulate nuisance and criminal activities that occur near alcoholic beverage sales establishments. This ordinance does not affect alcoholic beverage licenses or attempt to limit or restrict them. (See pt. IV. B.-D., post.) The city's recitation of the text of a statute in the context of a request for legislative clarification that some alcoholic beverage establishments should no longer be entitled to the protection of grandfather status does not shed any light on the issue presented in our case whether the new administrative mechanism may properly be applied to alcoholic beverage sales establishments that have been in continuous operation since before the ordinance was enacted. Thus, we conclude that the city's earlier statements on an unrelated issue do not preclude it from making the arguments that it now does in favor of its interpretation of section 23790.
2. Nuisance and Criminal Activities Control
(3b) The city contends that the ordinance merely creates an administrative mechanism for enforcing nuisance and criminal laws that are applicable to all alcoholic beverage establishments, even those in operation before the ordinance's effective date. CBRC couches the issue somewhat differently it argues that the Oakland ordinance creates a mechanism in the form of a retroactive land use ordinance that may result in the denial of the right to sell alcoholic beverages. As we have already concluded, the purpose of this ordinance is to control and abate nuisances and criminal activities occurring near alcoholic beverage sales establishments. (See Korean American Legal Advocacy Foundation v. City of Los Angeles, supra, 23 Cal. App.4th at p. 389 [no invasion of state power to regulate alcohol sales]; see pt. IV. D., post.) Thus, we begin our legal analysis of the applicability of section 23790 by considering this purpose.
By ordinance, a city council may declare what constitutes a nuisance. (Gov. Code, § 38771.) A city may bring an action to abate a public nuisance. *756 (Code Civ. Proc., § 731.) The California Supreme Court permits the abatement of even a grandfathered business if it constitutes a nuisance. In one case, the high court reasoned that zoning laws do not customarily interfere with existing conditions, but regulate future use of land. However, if a business constitutes a nuisance, it can still be abated in a proper exercise of the police power. (Jones v. City of Los Angeles (1930) 211 Cal. 304, 311 [295 P. 14].) In another, it reaffirmed that the right to continue a previously existing lawful business may be revoked if the business is found to be a nuisance. The abatement of such an existing business would be a lawful exercise of the police power, the court ruled. (Livingston Rock etc. Co. v. County of L.A. (1954) 43 Cal.2d 121, 128 [272 P.2d 4].) In a third case, the Supreme Court ruled that a city may determine what constitutes a nuisance and may take action to abate such a nuisance, despite the fact that the safety standards that had been incorporated in a building code sought to be enforced was enacted after construction of the building. (See City of Bakersfield v. Miller (1966) 64 Cal.2d 93, 96, 100 [48 Cal. Rptr. 889, 410 P.2d 393], cert. den. 384 U.S. 988 [16 L.Ed.2d 1005, 86 S.Ct. 1890].)
These cases support the conclusion that a city may properly enact a local ordinance to control and abate nuisance activities, despite the fact that the business that would be regulated by the ordinance possessed grandfather rights that might ordinarily render it immune from compliance with local ordinances. (See Livingston Rock etc. Co. v. County of L.A., supra, 43 Cal.2d at p. 128; Jones v. City of Los Angeles, supra, 211 Cal. at p. 311; see also City of Bakersfield v. Miller, supra, 64 Cal.2d at pp. 96, 100; Suzuki v. City of Los Angeles (1996) 44 Cal. App.4th 263, 277-281 [51 Cal. Rptr.2d 880].) If a city may abate a public nuisance despite grandfather rights, then a fortiori a municipality may enforce criminal laws in the face of such a claim of prior existing lawful operation.
CBRC counters that while these cases may support the city's authority to abate a public nuisance or control criminal activities, they did not arise in a context of a zoning ordinance enacted in violation of section 23790. It contends that section 23790 overrides the city's police powers. We disagree. Construing section 23790, it appears to us that the Legislature intended that this provision protect the vested rights of the proprietors of premises engaged in the lawful, licensed sale of alcoholic beverages. Such a business has acquired by the passage of time a vested right to continue in operation to lawfully dispense alcoholic beverages. However, for CBRC's challenge to the ordinance to succeed, we must also read this provision to mean that the Legislature intended that a licensed alcoholic beverage establishment retains a vested right to conduct its operation in a manner that encourages nuisance or criminal activities to occur on or near its premises.
*757 Such a conclusion defies logic. (6) We must construe the statute in a reasonable, commonsense manner consistent with the Legislature's apparent purpose and intent, the application of which will promote wise policy, not absurdity. (See DeYoung v. City of San Diego (1983) 147 Cal. App.3d 11, 18 [194 Cal. Rptr. 722]; see also 7 Witkin, Summary of Cal. Law (9th ed. 1988) Constitutional Law, § 94, pp. 146-148.) (3c) To interpret the concept of grandfather rights so far as to allow long-time businesses the freedom to conduct their operations in a manner that promotes nuisances and criminal activities would be absurd. A limited view of grandfather rights is also consistent with wise policy. As another court held when reviewing the applicability of grandfather rights under section 23790 in a different context, it makes sense for the number and type of events allowing nonconforming uses to avoid compliance with updated codes to be narrow and limited. (See Korean American Legal Advocacy Foundation v. City of Los Angeles, supra, 23 Cal. App.4th at p. 397.)
Nevertheless, CBRC urges us to find that section 23790 invalidates the ordinance because its enforcement may ultimately lead to a loss of a state-issued license to sell alcoholic beverages. However, the city ordinance does not halt operation of a licensed alcoholic beverage establishment. If an alcoholic beverage sales establishment fails to comply with the requirements of the ordinance after numerous administrative attempts to obtain compliance, the ordinance authorizes the city to seek a court order to abate a nuisance or to ask the Department of Alcohol Beverage Control to revoke the license. The city already has this authority independent of this ordinance which it may use in appropriate cases in the proper exercise of its police power. The ordinance does not create any new authority empowering the city to halt operation of an alcoholic beverage sales establishment premises. It merely creates an administrative mechanism that may result in a third party taking action against the alcoholic beverage seller abatement by a court or license revocation by the Department of Alcoholic Beverage Control.
In sum, we find that the conduct that is regulated by the ordinance the control and abatement of nuisances and criminal activities does not fall within the ambit of section 23790. A municipality retains the right to abate nuisances and enforce its criminal laws even in the face of grandfather rights. No business not even an alcoholic beverage sales establishment regulated by state law has a vested right to conduct its business in a *758 manner that attracts public nuisances and encourages criminal activities near its premises.[13]
C. Conclusion
The trial court erred in concluding that CBRC was entitled to a summary adjudication on the second cause of action for declaratory and injunctive relief based on its claim of illegal regulation in violation of section 23790. As the ordinance does not violate this statute, the city is entitled to summary adjudication on the second cause of action.
IV. CONSTITUTIONAL CLAIM
A. Article XX, Section 22
The city also contends that the trial court erred in granting CBRC summary adjudication on its third cause of action because it wrongly concluded that the ordinance's fees constitute an unlawful taxation. The third cause of action sought declaratory and injunctive relief, alleging unlawful taxation in violation of section 22 of article XX of the California Constitution. The trial court held that the fees imposed pursuant to the ordinance violated article XX, section 22 of the California Constitution. In its response to the city's petition for writ of mandate, CBRC contends that the $600 annual fee and the subsequent fees constitute unlawful license fees. Amici curiae Beer Institute of California, California Beer and Wine Wholesalers Association, Inc., and Wine Institute filed an amicus curiae brief in support of CBRC.
The Constitution provides that "[t]he State of California, subject to the internal revenue laws of the United States, shall have the exclusive right and power to license and regulate the ... sale ... of alcoholic beverages within the State.... [¶]... [¶] The Department of Alcoholic Beverage Control shall have the exclusive power ... to license the ... sale of alcoholic beverages in this State, and to collect license fees or occupation taxes on account thereof...." (Cal. Const., art. XX, § 22; see Board of Trustees v. Munro, supra, 163 Cal. App.2d at p. 445.) This provision of the *759 state Constitution took effect in 1933 when the Twenty-first Amendment to the United States Constitution took effect. (City of Rancho Cucamonga v. Warner Consulting Services, Ltd. (1989) 213 Cal. App.3d 1338, 1343 [262 Cal. Rptr. 349].) While it originally granted municipalities the right to license the manufacture, disposition or sale of alcoholic beverages, article XX, section 22 was amended in 1934 to delete this authority. (L.A. Brewing Co. v. Los Angeles (1935) 8 Cal. App.2d 391, 394 [48 P.2d 71].)
B. License Tax
The trial court concluded that the state Constitution precluded all city taxation applying solely to alcoholic beverage licensees. Specifically, it found that "there is no precedent in the area of alcoholic beverage law to allow for a municipality to impose a fee solely on sellers of alcoholic beverages because of the nature of their business." (7) On the petition for mandamus relief, the city first contends that the fees imposed by its ordinance do not constitute a license tax. It argues that the ordinance's fees are not imposed as a condition to the issuance of a license, but are required to pay for the costs of regulating nuisance and criminal activities associated with alcoholic beverage sales establishments.
The California Constitution grants the state Department of Alcoholic Beverage Control the exclusive power to collect license fees or occupation taxes related to alcoholic beverage sales. (Cal. Const., art. XX, § 22.) Liquor licenses are not subject to local license or occupation taxes. (Roehm v. County of Orange (1948) 32 Cal.2d 280, 290-291 [196 P.2d 550].) The Oakland ordinance does not require the payment of a fee on the issuance of a license. It grants deemed approved status to existing alcoholic beverage retailers and requires them to pay a fee to administer the enforcement of the ordinance's requirements. (Oakland Planning Code, §§ 15400, 15510(f).)
Courts distinguish between municipal revenue taxes that may be preempted by state law and fees properly imposed by a city pursuant to its regulatory authority to control and supervise a business that imposes an unusual burden on the local entity for services. For example, in one case, a city imposed a permit fee on house movers. State law specifically prohibits any municipal license fee to be imposed on intercity transportation. Despite this statute, the appellate court upheld the ordinance requiring the fee. The court found that purpose of the fee was to pay city inspection and administrative costs associated with house moving. The amount of the fee was based on reasonably anticipated costs of inspection and administration of the permitted house moving activities. Thus, the court concluded that the ordinance was a regulatory one and that the fee imposed was not preempted by *760 the prohibition on license fees. (Housemoving Contractors Assn. v. City of Glendale (1981) 123 Cal. App.3d 673, 675 [176 Cal. Rptr. 751]; see Pub. Util. Code, §§ 4303, 4304.)
We find this precedent persuasive in our own case. CBRC's criticism of this case on the ground that the license tax prohibition in Housemoving Contractors Assn. v. City of Glendale, supra, 123 Cal. App.3d 673 was statutory rather than constitutional strikes us as a distinction without a difference. A state statute, like a state constitutional provision, would prevail over a local ordinance if a conflict occurred. (See Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 290 [219 Cal. Rptr. 467, 707 P.2d 840] [local legislation in conflict with general law is void]; Korean American Legal Advocacy Foundation v. City of Los Angeles, supra, 23 Cal. App.4th at p. 384.) Both state laws specifically prohibit municipal license taxes. If the house moving fee does not constitute a license tax, neither does the fee imposed pursuant to Oakland's ordinance.
Nevertheless, CBRC and its amici curiae urge us to conclude that because the failure to pay the required fee may result in summary abatement and loss of the privilege of engaging in business, the fee constitutes a license tax. Neither abatement nor loss of the privilege of doing business will occur unless a court orders abatement or the Department of Alcoholic Beverage Control revokes the business's state-issued liquor license. (See §§ 24200-24211; Civ. Code, §§ 3490-3496; Oakland Planning Code, § 15510(c).) That the ultimate result of a failure to pay the city's required fee might be abatement or revocation of the state liquor license does not transform a regulatory fee to a license tax. Thus, we find that the ordinance's fees do not constitute an impermissible license tax.
C. Tax or Fee
(8a) The trial court impliedly concluded that the ordinance's fees constituted a tax on alcoholic beverage retailers. In its next claim in support of its petition for mandate, the city contends that the fees imposed pursuant to the ordinance are not taxes at all, but proper regulatory fees imposed without violating article XX, section 22 of the California Constitution. CBRC counters by arguing that the fee is a impermissible revenue-generating measure that is, a tax disguised as a fee.
(9) The state Constitution grants the state Department of Alcoholic Beverage Control the exclusive power to tax alcoholic beverage sales. (Cal. Const., art. XX, § 22; see Board of Trustees v. Munro, supra, 163 Cal. App.2d at p. 445.) A local tax on alcoholic beverage sales is preempted by state law. *761 (A.B.C. Distributing Co. v. City and County of San Francisco (1975) 15 Cal.3d 566, 575 [125 Cal. Rptr. 465, 542 P.2d 625]; see Century Plaza Hotel Co. v. City of Los Angeles (1970) 7 Cal. App.3d 616, 626 [87 Cal. Rptr. 166] [5 percent local excise tax on alcoholic beverage sales held illegal].) However, alcoholic beverages retailers may properly be required to pay their fair share of the cost of government. (Id. at p. 626.) If a business imposes an unusual burden on city services, a municipality may properly impose fees pursuant to its police powers. (See, e.g., Housemoving Contractors Assn. v. City of Glendale, supra, 123 Cal. App.3d at p. 675; United Business Com. v. City of San Diego (1979) 91 Cal. App.3d 156, 165-166 [154 Cal. Rptr. 263].) A local entity may not impose a tax on alcoholic beverage retailers under the guise of a fee. (See Cal. Const., art. XX, § 22.) Thus, we must determine whether the Oakland ordinance's fees are regulatory or are hidden taxes intended to generate unrelated revenue for the city.
The determination of whether the actual purpose of an ordinance is regulatory or revenue raising is a question of fact. (United Business Com. v. City of San Diego, supra, 91 Cal. App.3d at p. 165.) In the trial court, the parties posed no factual issues to be resolved, only legal questions. In its order granting summary adjudication, the trial court recited that the parties did not dispute that the fees generated revenue to fund the ordinance's programs. As the meaning of this recitation is somewhat ambiguous on this issue, we will consider how courts factually distinguish a fee from a tax.
(10) To determine whether the purpose of the ordinance is regulatory or revenue generating, the court looks to the substantive provisions of the ordinance, not merely its title and form. If revenue is the primary purpose of the ordinance and regulation is merely incidental, then the imposition is a tax. If regulation is the primary purpose, the mere fact that incidental revenue is also obtained does not make the imposition a tax. Generally, when a fee is imposed for a regulatory purpose and the ordinance requires compliance with conditions in addition to the payment of the prescribed sum, the imposed sum is a not a tax, but is a fee properly imposed pursuant to the local entity's police power. When the sum is exacted solely for a revenue purpose and its payment gives the right to carry on the business without any further condition, it is a tax. (See United Business Com. v. City of San Diego, supra, 91 Cal. App.3d at p. 165; see also Ainsworth v. Bryant (1949) 34 Cal.2d 465, 473 [211 P.2d 564] [regardless of formal title, character of tax determined by its incidents and from natural and legal effect of zoning ordinance language].)
Fees charged in connection with regulatory activities that do not exceed the reasonable costs of providing services necessary to the activity for which *762 the fee is charged and which are not levied for unrelated revenue purposes do not constitute a tax. (Pennell v. City of San Jose (1986) 42 Cal.3d 365, 375 [228 Cal. Rptr. 726, 721 P.2d 1111]; San Diego Gas & Electric Co. v. San Diego County Air Pollution Control Dist. (1988) 203 Cal. App.3d 1132, 1145-1146 [250 Cal. Rptr. 420].) Generally, a regulatory fee cannot exceed the sum reasonably necessary to cover the costs of the regulatory purpose sought. These costs include all those incident to the issuance of the permit, investigation, inspection, administration, maintenance of a system of supervision and enforcement. (United Business Com. v. City of San Diego, supra, 91 Cal. App.3d at p. 165.) The municipality need only apply sound judgment and consider probabilities according to the best honest view of informed officials in setting the amount of the regulatory fee. (Id. at p. 166.)
(11) To establish that a fee is a regulatory fee and not a tax, the local entity should prove the estimated costs of the regulatory activity and the basis for determining the manner in which the costs are apportioned, so that the charges allocated to a payor bear a fair or reasonable relationship to the payor's burdens on or benefits from the regulatory activity. (San Diego Gas & Electric Co. v. San Diego County Air Pollution Control Dist., supra, 203 Cal. App.3d at p. 1146.) It is not necessary that the payor perceive the regulation to be a benefit. A regulatory fee may be imposed pursuant to the local governmental entity's police power when the fee constitutes an amount necessary to carry out the purposes and provisions of the regulation. (Id. at p. 1146 fn. 18.)
(8b) In our case, city documents show that the annual operating budget for the program would be recovered in fees charged to alcoholic beverage retail establishments pursuant to the ordinance. Reinspection fees would be charged only to establishments that were found not to be in compliance with the terms of the ordinance. The estimated revenues derived from the fees match the program's proposed budget. The Oakland ordinance's revenue is intended to pay the administrative costs of its programs.[14] The ordinance's primary purpose is regulatory to create an environment in which nuisance and criminal activities associated with alcoholic beverage retail establishments may be reduced or eliminated. Thus, the fee imposed pursuant to the ordinance is not a tax imposed to pay general revenue to the local governmental entity, but is a regulatory fee intended to defray the cost of providing and administering the hearing process set out in the ordinance. (See, e.g., Pennell v. City of San Jose, supra, 42 Cal.3d at p. 375.)
*763 D. Regulatory Fee Applied Solely to Alcoholic Beverage Retailers
(12a) The trial court concluded that there was no precedent to allow a city to impose a fee on alcoholic beverage retailers because of the nature of their business. It impliedly agreed with CBRC's argument that the ordinance improperly singled out alcoholic beverage retailers. It its petition for writ of mandate, the city argues that the trial court erroneously concluded that the state Constitution prohibits a municipality from imposing a fee on alcoholic beverage establishments. CBRC counters that the trial court's ruling was correct because the fee was levied only against alcoholic beverage licensees. The city argues that a regulatory fee may be lawfully imposed on alcoholic beverage sales establishments.
As CBRC contends in its opposition to the petition for writ of mandate, a tax that singles out alcoholic beverage retailers is suspect. (A.B.C. Distributing Co. v. City and County of San Francisco, supra, 15 Cal.3d at p. 575.) However, we have already concluded that the ordinance requires the payment of a regulatory fee, not a tax of any kind. (See pt. III. B., C., ante.) To the extent that this suspect character also applies to regulatory fees, we note that to label a fee as "suspect" does not compel the finding that the fee is prohibited. As with other businesses, alcoholic beverage establishments may properly be required to pay their fair share of the cost of government. (See Century Plaza Hotel Co. v. City of Los Angeles, supra, 7 Cal. App.3d at p. 626.) That the fee will probably be paid from revenue derived at least in part from the sale of alcoholic beverages creates only an indirect burden on an alcoholic beverage retailer one that is insufficient to nullify the otherwise proper imposition of a regulatory fee. (See A.B.C. Distributing Co. v. City and County of San Francisco, supra, at p. 575 [tax case].)
CBRC does not dispute that the city may properly regulate nuisance and criminal activities through its exercise of its police power, but it argues that these police powers are overridden by article XX, section 22 of the California Constitution, when the regulation involves alcoholic beverages. Thus, the issue is whether a local entity's authority to regulate alcoholic beverage sellers properly derives from the city's police power under article XI, section 7 of the California Constitution. (See City of Rancho Cucamonga v. Warner Consulting Services, Ltd., supra, 213 Cal. App.3d 1338, 1345.) A local entity's authority to regulate state-licensed alcoholic beverage retailers derives solely from its general police powers. (Id. at pp. 1343, 1345.) A city's police powers are as broad as the police power that may be exercised by the Legislature itself. However, in its proper exercise of its police powers, the city may not also violate article XX, section 22. (213 Cal. App.3d at pp. 1344-1345.)
*764 Article XX, section 22 of the California Constitution gives the state Department of Alcohol Beverage Control exclusive jurisdiction to regulate alcohol. (Korean American Legal Advocacy Foundation v. City of Los Angeles, supra, 23 Cal. App.4th at p. 385.) If the purpose and effect of the city ordinance is to regulate the manufacture, sale, purchase, possession or transportation of alcoholic beverages, the legislation is expressly preempted by the state Constitution. (Ibid.; Floresta, Inc. v. City Council (1961) 190 Cal. App.2d 599, 606-607 [12 Cal. Rptr. 182].) For example, an express prohibition of the sale of alcoholic beverages at automobile service stations conflicts with article XX, section 22. (Mussalli v. City of Glendale (1988) 205 Cal. App.3d 524, 528 [252 Cal. Rptr. 299]; see § 23790.5 [by legislative enactment, local entities may now regulate alcoholic beverage sales at service stations].) Despite this constitutional prohibition, the state Legislature has expressed its intent that local entities not the state control local matters. (Jon-Mar Co. v. City of Anaheim (1962) 201 Cal. App.2d 832, 837 [20 Cal. Rptr. 350].) The resolution of the issue before us turns on whether the Oakland ordinance trods on the state's regulatory power or falls within local authority.
Courts have recognized that local regulation of alcoholic beverage retailers may be properly within the local entity's police powers without violating section 22 of article XX of the California Constitution. Generally, this constitutional provision will not preempt a local ordinance when the ordinance does not directly affect the licensee's ability to sell alcoholic beverage to a willing purchaser. (California Restaurant Assn. v. City of Los Angeles (1987) 192 Cal. App.3d 405, 411 [237 Cal. Rptr. 415] [local ordinance requiring posting of notice warning of alcohol effects on pregnant women was not preempted by Constitution]; see Daniel v. Board of Police Commissioners (1961) 190 Cal. App.2d 566, 570-571 [12 Cal. Rptr. 226], overruled on other grounds in Burton v. Municipal Court (1968) 68 Cal.2d 684, 693 [68 Cal. Rptr. 721, 441 P.2d 281] [prohibition of live entertainment at alcoholic beverage establishment does not interfere with licensee's right to sell alcoholic beverages].) The Legislature did not intend that a person licensed to sell alcoholic beverages should be immune from local supervision of any activity that the licensee may pursue in conjunction with the sale of alcoholic beverages. (Id. at p. 570.)
For example, the California Supreme Court has held that local ordinances may properly regulate live entertainment in taverns while leaving intact the state's jurisdiction to license the sale of alcoholic beverages. The two types of regulations were held to be independent and distinct. Thus, ordinances relating to live entertainment do not conflict with the state's powers over the *765 sale of alcoholic beverages. (Crownover v. Musick (1973) 9 Cal.3d 405, 417-418 [107 Cal. Rptr. 681, 509 P.2d 497], cert. den. sub nom. Reynolds v. City of Sacramento, 415 U.S. 931 [39 L.Ed.2d 489, 94 S.Ct. 1443]; Owen v. Musick, 415 U.S. 931 [39 L.Ed.2d 489, 94 S.Ct. 1443], disapproved on another point in Morris v. Municipal Court (1982) 32 Cal.3d 553, 564-565 [186 Cal. Rptr. 494, 652 P.2d 51].) In another case, an appellate court concluded that a municipality retains the constitutional right to enforce a zoning ordinance that does not permit a cocktail lounge in a shopping center without a use permit. This prerogative was held not to have been preempted by the state's generalized regulation of alcohol sales. (See Floresta, Inc. v. City Council, supra, 190 Cal. App.2d at pp. 612-613.) In a third case, another appellate court upheld a local ordinance prohibiting persons possessing, using, consuming or under the influence of alcohol from entering or remaining in a modeling studio adjacent to an alcoholic beverage retail establishment. The court found that the ordinance did not attempt to invade the exclusive power given to the state pursuant to article XX, section 22 of the state Constitution to license, regulate or prohibit the sale of alcoholic beverages. (See Cristmat, Inc. v. County of Los Angeles (1971) 15 Cal. App.3d 590, 594-598 [93 Cal. Rptr. 325]; see also Mussalli v. City of Glendale, supra, 205 Cal. App.3d at p. 528.) Courts upheld these ordinances because their purpose was properly related to the police powers, distinct from the direct regulation of alcoholic beverage licensees.
CBRC characterizes the Oakland ordinance as a regulation of alcoholic beverage retailer sellers. However, the purpose of the ordinance determines the issue before us. (See Daniel v. Board of Police Commissioners, supra, 190 Cal. App.2d at p. 571 [purpose of ordinance was to regulate live entertainment furnished in restaurants and cocktail lounges; local ordinance did not violate Cal. Const., art. XX, § 22].) To paraphrase one of these cases, the city may regulate nuisances and criminal activity pursuant to its police power. An ordinance prohibiting nuisance and criminal activities from being conducted on or near the premises of liquor licensees falls within the legitimate scope of the city's police power. The regulation is not intended to control the sale of alcoholic beverages, but to eliminate nuisances and criminal activities. (See Cristmat, Inc. v. County of Los Angeles, supra, 15 Cal. App.3d at pp. 595-596 [under art. XX, § 22, ordinance may regulate floor shows in places of public entertainment where alcoholic beverages are served]; see also Mussalli v. City of Glendale, supra, 205 Cal. App.3d at p. 528.) We are satisfied that the ordinance's purpose is the regulation of nuisance and criminal activity a subject independent and distinct from the regulation of alcoholic beverage sales. Thus, the ordinance does not conflict with the state's authority to regulate alcoholic beverage sales. (See *766 Crownover v. Musick, supra, 9 Cal.3d at pp. 417-418; see also City of Rancho Cucamonga v. Warner Consulting Services, Ltd., supra, 213 Cal. App.3d at pp. 1343-1344; Mussalli v. City of Glendale, supra, 205 Cal. App.3d at p. 528.)
Our conclusion is consistent with a recent decision of the Second Appellate District holding that the revocation requirements of a similar ordinance did not invade the state's exclusive power to regulate alcohol sales pursuant to article XX, section 22 of the California Constitution. In Korean American Legal Advocacy Foundation v. City of Los Angeles, supra, 23 Cal. App.4th 376, the city required a conditional use permit for all establishments selling alcoholic beverages. Uses in existence before the operative date of the specific plan requiring a conditional use permit were deemed to be approved conditional use permits. (Id. at p. 382.) After fire destroyed businesses in South Central Los Angeles, alcoholic beverage establishments seeking to rebuild were required to comply with the specific plan. Typically, the conditions imposed before rebuilding would be permitted were for the owner to agree to remove graffiti promptly, provide adequate lighting, remove trash, provide a security guard and limit hours of operation. (Id. at pp. 382-383.) In addition, the city instituted revocation hearings to revoke or condition an owner's deemed approved status or use permit if the business threatened to become, or became, a nuisance or a law enforcement problem. (Id. at p. 383.)
The appellate court found that the Los Angeles ordinance at issue in that case constituted a valid exercise of the city's police powers to control and abate nuisances under article XI, section 7 of the state Constitution. (Korean American Legal Advocacy Foundation v. City of Los Angeles, supra, 23 Cal. App.4th at p. 389.) It ruled that the city was not preempted by article XX, section 22 from exercising land use control over businesses licensed to sell alcoholic beverages. (23 Cal. App.4th at pp. 384, 389-390.) Although it acknowledged the state's exclusive jurisdiction to regulate alcoholic beverage sales, the court concluded that the ordinance did not directly regulate alcoholic beverage licensees. (Id. at p. 388.) It found that the ordinance was not expressly preempted by the state Constitution, that it did not duplicate or contradict state law, and that the statutory scheme codified in the Alcoholic Beverage Control Act did not evidence an intent to occupy the field by implication. (Id. at pp. 390-394; see §§ 23000-25762.) Korean American's preemption analysis differs somewhat from ours, but our conclusion is the same that a city in the exercise of its police powers may undertake to control nuisances occurring near alcoholic beverage sales establishments, without violating the state's exclusive power to regulate the sale of alcoholic beverages. (See 23 Cal. App.4th at pp. 384-394.)
*767 The policy reason for the distinction between a city's improper direct regulation of alcoholic beverage sales and its appropriate use of its police powers applying to alcoholic beverage sales establishments is well established. (13) As the California Supreme Court has ruled, local governments have a legitimate need to address problems generated by business involvement in activities that may be inimical to the health, welfare and safety of the community. (Cohen v. Board of Supervisors, supra, 40 Cal.3d at p. 298.) State requirements may be inadequate to meet the demands of densely populated cities. Thus, it becomes proper and necessary to add to state regulations those provisions adapted to the city's special requirements. (Ibid.; Daniel v. Board of Police Commissioners, supra, 190 Cal. App.2d at p. 571; see Bravo Vending v. City of Rancho Mirage, supra, 16 Cal. App.4th at p. 411.) For this reason, a local entity may properly determine that a particular business fosters, profits from and provides an environment for activities proscribed by state law. For example, an ordinance is not transformed into a statute prohibiting crime simply because the city uses its police powers to discourage illegal activities associated with certain businesses. Many regulatory ordinances have a direct impact on the enforcement of state laws that have been enacted to preserve the health, safety and welfare of state and local citizens. This fact does not deprive a local entity of the power to enact them. (See Cohen v. Board of Supervisors, supra, at pp. 298-299 [licensing ordinance case].) (12b) The legislative history of the ordinance shows that there are substantial geographic, economic or other distinctions that persuade us of the need for local control. (See id. at p. 300.)[15]
E. Federal Bar
(14) For its part, CBRC challenges the city's authority under the Twenty-first Amendment to the United States Constitution to tax sellers of alcoholic beverages. (U.S. Const., Amend. XXI.) The trial court found only *768 that the ordinance violated the state Constitution; it did not rule on whether the ordinance also violated the federal Constitution. The Twenty-first Amendment grants the state authority to tax and regulate liquor licensing, although the state may delegate that authority to local entities. (City of Rancho Cucamonga v. Warner Consulting Services, Ltd., supra, 213 Cal. App.3d at pp. 1342-1343). We have concluded that the ordinance imposes a regulatory fee, not a tax. (See pt. IV. B.-D., ante.) As the state Constitution does not prohibit the ordinance's regulatory fees, the state has impliedly delegated to municipalities the power to impose such fees. Thus, we are satisfied that the ordinance does not violate the Twenty-first Amendment.
F. Conclusion
The trial court erred in concluding that CBRC was entitled to a summary adjudication on the third cause of action for declaratory and injunctive relief, based on its claim of unlawful taxation in violation of section 22 of article XX of the California Constitution. As the ordinance does not violate this provision of the state Constitution, the city is entitled to summary adjudication on the third cause of action.
V. REMITTITUR
Let a peremptory writ of mandate issue directing the Superior Court of Alameda County to vacate its order of January 5, 1995, granting CBRC summary adjudication on the second and third causes of action, and to enter a new order denying CBRC's motion and granting summary adjudication on these two causes of action in favor of the city.
Anderson, P.J., and Poche, J., concurred.
A petition for a rehearing was denied June 17, 1996, and the petition of real parties in interest for review by the Supreme Court was denied August 14, 1996.
NOTES
[1] "Grandfathered" businesses are nonconforming uses that are not required to seek permits under local zoning ordinances enacted after they were in business. (See Korean American Legal Advocacy Foundation v. City of Los Angeles (1994) 23 Cal. App.4th 376, 397 [28 Cal. Rptr.2d 530].)
[2] All statutory references are to the Business and Professions Code unless otherwise indicated.
[3] "An Activity shall retain its Deemed Approved Status only if it conforms with all of the following Deemed Approved Performance Standards: [¶] (a) That it does not result in adverse effects to the health, peace or safety of persons residing or working in the surrounding area. [¶] (b) That it does not result in jeopardizing or endangering the public health or safety of persons residing or working in the surrounding area. [¶] (c) That it does not result in repeated nuisance activities within the premises or in close proximity of the premises, including but not limited to disturbance of the peace, illegal drug activity, public drunkenness, drinking in public, harassment of passersby, gambling, prostitution, sale of stolen goods, public urination, theft, assaults, batteries, acts of vandalism, excessive littering, loitering, graffiti, illegal parking, excessive loud noises, especially in the late night or early morning hours, traffic violations, curfew violations, lewd conduct, or police detentions and arrests. [¶] (d) That it does not result in violations to any applicable provision of any other city, state, or federal regulation, ordinance or statute. [¶] (e) That its upkeep and operating characteristics are compatible with and will not adversely affect the livability or appropriate development of abutting properties and the surrounding neighborhood." (Oakland Planning Code, § 15210.)
[4] Full service restaurants, except those located on East 14th Street, Foothill Boulevard, MacArthur Boulevard, West MacArthur Boulevard, San Pablo Avenue north of 16th Street, and Edes Avenue between Clara Street and Bergedo Avenue, are exempt from the ordinance and are not required to pay the fee.
[5] The California Beverage Retailer Coalition is a nonprofit organization of alcoholic beverage retailers. Village Market is a retail grocery doing business in Oakland and operates under a valid off-sale liquor license issued by the State of California before the September 1, 1993, operative date of the Oakland ordinance. The third plaintiff in the original complaint Clem Daniels, Inc. is not a plaintiff in the second amended complaint and is not a real party in interest on appeal. For convenience, this opinion refers to the California Beverage Retailer Coalition and Village Market as "CBRC."
[6] The Coalition on Alcohol Outlet Issues consists of the California chapter of the National Black Alcoholism Council, the California Latino Alcohol and Other Drug Coalition, the Narcotics Education League, Jubilee West Inc., Interfaith Prevention Program, Inc., and Alcohol Policy Network. This group supports the city's ordinance. For convenience, all these groups will be referred to as "CAOI."
[7] The city asks us to take judicial notice of the record in California Beverage Retailer Coalition v. City of Oakland, supra, A064898. We have done so. (See Evid. Code, §§ 452, subd. (d)(1), 459, subd. (a).)
[8] The issue of the absence of an adequate remedy in the ordinary course of law has already been determined by the granting of an alternative writ. (Brown v. Superior Court (1971) 5 Cal.3d 509, 515 [96 Cal. Rptr. 584, 487 P.2d 1224].) We include this part to explain our reason for granting the alternative writ.
[9] The cities and towns joining as amici curiae in support of the city are the Cities of Alameda, Anaheim, Bakersfield, Carlsbad, Chico, Cypress, Fresno, Glendale, Lemon Grove, Lodi, Los Altos, Monterey, Redlands, Sacramento, San Jose, Santa Cruz, Santee, Torrance and Walnut Creek and the Town of Los Gatos.
[10] Although neither party addresses this specific point, CBRC does not contend that the alcoholic beverage sales establishments were in operation before the city began regulating nuisances and criminal activities.
[11] The Legislative Counsel of California rendered an opinion in 1993 concluding that a court reviewing the Oakland ordinance would find that it was preempted by article XX, section 22 of the California Constitution and section 23790. However, the same report also noted that a contrary argument could be made that the ordinance "regulates a nuisance aspect of the liquor business, effects of consumption, that is not covered by state law either expressly or by implication."
[12] Although, for convenience, we state this issue in terms of CBRC's objections to the ordinance, we do not mean to suggest that we believe that CBRC has the burden of proof on this or any other issue presented in the petition. As the moving party, the city has the obligation to prove that the ordinance passes muster.
[13] We are aware that other courts have analyzed the question of violation of section 23790 as a preemption question. (See Suzuki v. City of Los Angeles, supra, 44 Cal. App.4th at pp. 266, 281; Boccato v. City of Hermosa Beach, supra, 29 Cal. App.4th at p. 1807; Korean American Legal Advocacy Foundation v. City of Los Angeles, supra, 23 Cal. App.4th at p. 394.) However, our conclusion that the city's authority to control and abate nuisances and criminal activities exists despite any grandfather rights makes it unnecessary for us to also consider whether the ordinance is preempted by section 23790. Clearly, if the statute does not preclude the city's use of its authority to control and abate nuisances and criminal activities, the state statute would not preempt this ordinance.
[14] At trial, the parties agreed that the fees generated revenue to fund the ordinance's programs.
[15] The record reveals that the application of this ordinance to alcoholic beverage retailers alone was not unreasonable, given the high level of nuisance and criminal activity occurring near these establishments. Oakland's deputy chief of police testified about the proliferation of complaints about nuisance and criminal activities occurring around alcoholic beverage retail sales establishments. He opined that these activities constituted a blight on the neighborhoods where these alcoholic beverage establishments were located and served as a magnet for crime and neighborhood decay. He also stated that the number of police responses around alcoholic beverage establishments was disproportionately high when compared to police activity around adult entertainment facilities, gun dealer outlets, fast food restaurants or gas stations. Nuisance problems associated with alcoholic beverage retailers had risen over several years before the ordinance's enactment and the deputy chief opined that the program established by the ordinance would "... `significantly mitigate the negative impacts that many of these establishments have on the community.'"
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..
EA'ITORNEY GENERAL
OF’ %-EXAS
AUSTIN ~~.‘lkxas
WILL WILSON
A-ORNEY GBNE-I. July 22, 1960
Honorable J. W. Edgar Opinion NO. W-892
Commissioner of Education
Austin, Texas Re: May a junior college
district legally expend
local maintenance funds
when available for estab-
lishment and operation of
a television station facil-
ity (to be located within
or without the dlstrlct) as
a cooperative educational
project with other public
Dear Dr. Edgar: educational entities.
We are in receipt of your letter requesting our
opinion on certain questions concerning the legality
of an educational television station.
Your questions read as follows:
I'Maya junior college district legally
expend local maintenanc,efunds when available:
"1. For establishment and operation of
a television station facility (to be located
within or without the district) as a coopera-
tive educational project with other public
educational entities?
"2 . For the costs of providing or ser-
vicing the district with educational tele-
vision broadcasts from a television channel
or station?
“3. And/or for the costs of procurement
from and televising by a certain television
station of educational programs or services
designated by the District for augmentation
of Its educational program?"
.. -
Honorable J. W. Edgar, Page 2 (W-892)
The authorized expenditures for which local main-
tenance funds may be used are set out in Article 2827,
Vernon's Civil Statutes, which reads in part as follows:
"The public free school funds shall
not be expended except for the following
purposes:
"2. Local school funds from district
taxes, tuition fees of pupils not entitled
to free tuition and other local sources may
be used for the purposes enumerated for
State and county funds and for purchasing
appliances and supplies, for the payment of
insurance premiums, janitors and other em-
ployees, for buying school sites, buying,
building and repairing and renting school
houses, and for other purposes necessary in
the conduct of the public schools to be
determined by the board of trustees . . ."
Article 2827 quoted above is applicable to Junior
College Districts by virtue of Article 2815h, Section 5,
Vernon's Civil Statutes, which reads as follows:
"The Board of Trustees of Junior Col-
lege Districts shall be governed in the
establishment, management and control of
the Junior College by the General Law
governing the establishment, management
and control of Independent School Districts
insofar as the General Law is applicable."
Section 20 of Article 2815h, Vernon!s Civil Statutes,
reads in part as follows:
Said Board of Trustees shall
. . . &l is such they shall constitute
a body corporate by the name of the Junior
College District , State of Texas,
and in that name may acquire and hold real
and personal property, sue and be sued, and
may receive bequests and donations, or other
moneys or funds coming legally into their
hands, and may perform other acts for the
promotion of education in said district."
- -
Honorabie J. W. Edgar, Page 3 (w-892)
It is our opinion that the language of this Sec-
tion quoted above does not expand or enlarge the pur-
poses for which junior college funds may be expended
but rather it pertains only to the authority of the
trustees to perform acts as a corporate body in the
name of the junior college, the authorization for the
particular acts being elsewhere in the statutes.
We believe that the answer to your first question
is controlled by Attorney Gneral's Opinion O-4573
(1942), a copy of which is attached hereto, and the
authorities cited therein, which hold that a junior
college district may legally expend local maintenance
funds for erection of a school building provided that
the funds used are surplus funds and that a deficiency
debt is not thereby created against the district. This
raises the question of whether or not a television
station facility Is a school building.
In Adams v. Miles, 300 S.W. 211 (1927), the Court
of Civil Appeals in an opinion affirmed by the Commis-
sion of Appeals in 41 S.W. 2d 21 said the following:
"We are of the opinion tha~tunder
the powers granted common school district
trustees by the statutes above referred
to Sec. 1, Art. VII, Tex. Coast., Arts.
274.A9 2749, 2827, R.C.S.j, those trustees
have the authority,to be reasonably exer-
cised within their discretio:n,to
appropriate the surplus funds in their
hands to the constructi:X!of a 'school-
house', such as that proposed here, to be
used by them In providing "living quarters
for the teachers of sala school, and fo?
such other purposes as to the trustees of
said district may seem prop:r or necessary
In conducting said school',
In Mosely v. City of Dallas, 17 S.W. 2d 36 (Corn.
App,), the Court recogn:zedthat the board of trustees
may exercise considerable discretion as to the purposes
for which the public free school funds may be expended
due to the language of Article 2827.
The case of Youn Linwood School District No. 17,
97 saw. 2d 627, iiiYo* the_:
que&ion of whether or not a
gymnasium building with rooms for home economics and
Honorable J. W. Edgar, Page 4 (W-892)
vocational agriculture was a school building under a
statute authorizing the issuance bonds for building
and equipping school buildings. The Supreme Court of
Arkansas held that It was a school building and the
following language Is from their opinion:
we think the words ‘school bulld-
lngs’, ‘ai ised therein, mean any such school
dlatrict bulldlng as may be needful, necessary,
or proper for the conduct of a school in said
district. ”
Article 2815r-1 specifically authorizes the several
governing boards of the Junior Colleges to enter into
contracts with munlclpalltles and school districts for
the joint construction of buildings and other structures,
In vlew of the foregoing authorltlea It ia our
opinion that a junior aollege dietriot may legally expend
local maintenanoe funds when avallable for eetabllshment
and operation of a tslevlaion station faallity as a
oooperative educational project with other public eduoa-
tional entltise where the trusteee determine suoh a pro-
jeot to bo neoeaaary in the oonduot of the sohool.
- -
Honorable J. W. Edgar, Page 5 (w-892)
I!
.. . and the Legislature may au.thorlse
an additional ad valorem tax to be levied and
collected within all school districts hereto-
fore formed or hereafter formed, for the fur-
ther maintenance of public free schools, and
for the erection and e ulpment of school build-
ings therein; . . .' 4Emphasis added)
From the authorities cited above we conclude that
the question of whether or not a junior college district
may expend local maintenance funds when available for
either the cost of providing or servicing the district
with educational television or for the costs of educa-
tional programs or services for the augmentation of its
educational program is a questlon that rests within the
sound discretion of the trustees of said district.
Questions 2 and 3 are, therefore, answered in the affirm-
ative, provided that the trustees in the exercise of
their discretion determine that such activities are
necessary in the conduct of the school.
SUMMARY
A junior college district may legally
expend local maintenance funds when
available for establishment and opera-
ticn of a television station facility
(located within the district) as a
cooperative educational project with
other public educational entitles, pro-
vided the trustees of the district in the
exercise of their discretion determine
such a project to be necessary In the con-
duct of the school, and provided further
that only surplus funds are used and a
deficiency debt is not thereby created
against the district. Such funds may
also be legally expended for the costs of
providing the district with educational
television broadcasts or for the procure-
ment and televising of programs to augment
Honorable J. W. Edgar, Page 6 (w-892)
the district's program where the
trustees in the exercise of their
discretion determine these activi-
ties to be necessary in the con-
duct of the school.
Yours very truly,
WILL WILSON
Attorney General of Texas
By k%J&ftLdJ
Robert A. Rowland
Assistant
RAR:mm
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
Martin DeStefano
Riley Eugene Fletcher
Howard Mays
John C. Phillips
REVIEWED FOR THE ATTORNEY GENERAL
BY: Leonard Passmore
| {
"pile_set_name": "FreeLaw"
} |
620 F.Supp. 336 (1985)
PATHFINDER MINES CORPORATION, Plaintiff,
v.
William CLARK,[*] Secretary of the U.S. Department of Interior, and the United States of America, Defendants,
and
Arizona Wildlife Federation and National Wildlife Federation, Defendants/Intervenors.
No. Civ 84-105 PHX PGR.
United States District Court, D. Arizona, Division Four.
October 1, 1985.
*337 John C. Lacy, Tucson, Ariz., for plaintiff.
John R. Mayfield, Asst. U.S. Atty., Phoenix, Ariz., for defendants.
Kimberly J. Graber, Phoenix, Ariz., for defendants/intervenors.
MEMORANDUM OPINION
ROSENBLATT, District Judge.
The plaintiff in this action, Pathfinder Mines Corporation, is a mining company that has filed 22 mining claims within the boundaries of the Grand Canyon National Game Preserve (hereinafter Game Preserve). Those mining claims were declared void ab initio by the Chief of the Branch of Lands and Mineral Operations, Arizona Office of the Bureau of Land Management, Department of Interior. That decision was affirmed by the Interior Board of Land Appeals of the Department of the Interior (hereinafter IBLA). That body replaced the Director of the Bureau of Land Management (BLM) and the Secretary of the Interior as the appellate administrative body that reviews mineral locations and patent applications.
The present action is one for review of that decision by the IBLA. A decision of the IBLA body is reviewed by this Court under the standards of the Administrative Procedure Act, 5 U.S.C. §§ 701-706. It comes before this Court on cross motions for summary judgment. In addition to motions from the plaintiff mining company and the defendant Department of the Interior, there is also a motion for summary judgment by the defendants/intervenors, the Arizona Wildlife Federation and the National Wildlife Federation, seeking to have the IBLA decision affirmed. All parties believe that there are no material issues of fact and that this matter may be resolved as a matter of law.
Resolution of this matter requires this Court to construe and evaluate federal legislation and presidential proclamations from near the turn of the century (1893-1906) in order to divine the intent of Congress and President Theodore Roosevelt with respect to mineral entry within the Game Preserve. This is no easy task. The voluminous legislative history that would be generated on legislation of this kind today was not prevalent in that period. The only factual questions herein involve the facts and circumstances surrounding the passage of the legislation and the extent to which those influence this Court's construction of the statutes.
Decision of the IBLA
The IBLA affirmed the decision of the Chief, Branch of Lands and Mineral Operations that the plaintiff's 22 mining claims were void ab initio because the land within the Preserve has been withdrawn from mineral entry. 70 IBLA 264 (1983). It is the position of the Department of the Interior and the IBLA that the creation of the Game Preserve withdrew the lands by implication because mineral entry under the General Mining Laws of 1872 is inconsistent with the purpose of the Preserve.
The IBLA relied primarily on opinions previously issued by the Department of the Interior and the Attorney General and the legislative history of the acts and proclamations. No court has ever considered whether the Game Preserve is closed to mineral entry under the General Mining Laws of 1872.
Standard of Review
Section 706 of the Administrative Procedure Act, 5 U.S.C. § 706, provides the standard of review.
§ 706. Scope of review
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning of applicability of the terms of an agency action. The reviewing court shall
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to be
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
*338 (B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.
In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.
It is the plaintiff's position that the decision of the IBLA is not in accordance with law and should be set aside under § 706 (2)(A).
The Supreme Court has made the following observation about the court's role in this type of review:
When faced with a problem of statutory construction, this Court shows great deference to the interpretation given the statute by the officers or agency charged with it administration. "To sustain the Commission's application of this statutory term, we need not find that its construction is the only reasonable one or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings." Unemployment Comm'n of Territory of Alaska v. Aragon, 329 U.S. 143, 153, 67 S.Ct. 245, 250, 91 L.Ed. 136. See also e.g., Gray v. Powell, 314 U.S. 402, 62 S.Ct. 326, 86 L.Ed. 301; Universal Battery Co. v. United States, 281 U.S. 580, 583, 50 S.Ct. 422, 74 L.Ed. 1051. "Particularly is this respect due when the administrative practice at stake `involves a contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion; of making the parts work efficiently and smoothly while they are yet untried and new.'" Power Reactor Development Co. v. International Union of Electricians, 367 U.S. 396, 408, 81 S.Ct. 1529, 1535, 6 L.Ed.2d 924.
Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965).
In cases such as this, in which resolution is controlled by the construction of statutes, the Court should look to the face of the act, the surrounding circumstances, and the legislative history with an eye toward determining what congressional intent was. Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 586, 97 S.Ct. 1361, 1362, 51 L.Ed.2d 660 (1977). "In determining legislative intent, it is necessary to consider the legislation in its historical context and not as if it was passed today." Ute Indian Tribe v. State of Utah, 716 F.2d 1298, 1303 (10th Cir.1983) (citing Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 98 S.Ct. 1011, 55 L.Ed.2d 209 (1978)). At the same time
(i)t has long been recognized that: increasingly as a statute gains in age ... its language is called upon to deal with circumstances utterly uncontemplated at the time of its passage. Here the quest is not properly for the sense originally intended by the statute, ... but rather for the sense which can be quarried out of it in the light of the new situation.... For this reason, generally, a court interpreting a statute should: `ask itself not only what the legislation means abstractly, or even on the basis of legislative history, but also what it ought to mean in terms of the needs and goals of our present day society. This approach is required by the insuperable difficulties of readjusting old legislation by the legislative process and by the fact that it is obviously impossible to secure an omniscient legislature.'
West Winds, Inc. v. M.V. Resolute, 720 F.2d 1097, 1101 (9th Cir.1983) (emphasis in original).
Given these standards, this Court must affirm the decision of the IBLA. The decision is a reasonable and well founded analysis of a difficult problem. When this *339 Court finds that the IBLA's construction is a reasonable one, it must affirm even if the result is not the one that the Court would have reached if the question was first presented to it. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). There is certainly evidence that supports the position of each party to this dispute, but the evidence in support of the plaintiff's position does not warrant rejection of the departmental interpretation. A review of the relevant arguments demonstrates the reasonableness of the IBLA's approach.
Discussion
The Grand Canyon Forest Reserve was first established by Congress in 1893, (27 Stat. 1064, Proclamation No. 45, February 20, 1893), and enlarged in 1905 (34 Stat. 3009, May 6, 1905) and 1906 (34 Stat. 3223, August 8, 1906). On June 6, 1906, Congress passed the authorization act for the establishment of the Grand Canyon Game Preserve (Public Law No. 339, 34 Stat. 607). That act authorized the President "to designate such areas in the Grand Canyon Forest Reserve as should, in his opinion, be set aside for the protection of game and be recognized as a breeding place therefor." Id. Pursuant to that authorization, President Theodore Roosevelt issued a proclamation on November 28, 1906, setting aside the area of the Grand Canyon Forest Reserve that lay north and west of the Colorado River. (34 Stat. 3263). This area is known as the North Kaibab today.
On June 4, 1897, Congress passed the Organic Act relating to the management of the National Forest Reserves. (30 Stat. 11, 34-36). That act stated that it was not the purpose or intent of the acts establishing forest reservations to include those lands that would be more valuable for the minerals found on them or for agricultural purposes. It said:
No public forest reservation shall be established, except to improve and protect the forest within the reservation, or for the purpose of securing favorable conditions of water flows, and to furnish a continuous supply of timber for the use and necessities of citizens of the United States; but it is not the purpose or intent of these provisions, or of the Act providing for such reservations, to authorize the inclusion therein of lands more valuable for the mineral therein, or for agricultural purposes, than for forest purposes.
30 Stat. at 35. Therefore, the Act provided that lands could be eliminated from the reserve if it were found by the Secretary of the Interior with the approval of the President that the land was better suited for mining or agricultural purposes than for timber.[1] No portion of the Grand Canyon National Forest Reserve was ever eliminated under that provision.
Relying on the provisions of the statement of intent in the Organic Act, plaintiff argues that mineral lands within the forest reserve were excluded from the forest reserve and therefore were excluded from the Game Preserve. It is clear, however, that the Act did not exclude mineral lands from the reserves, it merely provided a mechanism for eliminating lands from the reserve.
The plaintiff also argues that, absent a specific prohibition or withdrawal, mineral entry is permitted within the Preserve because it was permitted within the forest reserve from which it was created. Two problems exist with this theory. First, it is unclear the extent to which the Organic Act intended to open the forest reserves to mining. Second, the fact that mining may have been permitted within the reserve does not necessarily mean that it continued to be permissible when it became a game preserve. Setting the land aside as a forest reserve implies some limitation on its use. The additional legislative act of setting the land aside as a game preserve implies even greater restrictions on its use.
The Organic Act had a clause that read:
Nor shall anything herein prohibit any person from entering upon such forest *340 reservations for all proper and lawful purposes, including that of prospecting, locating, and developing the mineral resources thereof: Provided That such persons comply with the rules and regulations covering such forest reservations.
30 Stat. at 36. Historical materials clearly indicate that the terms of the Organic Act were the result of substantial controversy and compromise. E.g., J. Ise, The United States Forest Policy, 125-138 (1920); Pinchot, Mining and the Forest Reserves, 28 Trans. of American Institute of Mining Engineers 339 (1898). Toward that end, it appears that Congress was intentionally obscure to placate the various competing interests at that time. It was a compromise between the conservationists and the western interests, particularly the miners, who felt that they had been shut out of vast portions of western land by the various acts establishing forest reserves. Such a compromise was probably necessary to prevent the forest reserves from being abolished. Cf. id. It is clear, however, that unlimited mining under the General Mining Laws of 1872 was not contemplated. Prospecting, locating and developing were limited to the extent that they had to be done in conformity with the rules and regulations covering forest reservations. 30 Stat. at 35; United States v. Weiss, 642 F.2d 296 (9th Cir.1981). Unquestionably, some amount of mining was permitted under the terms of the Act. Unfortunately, this does not resolve the second problem. It does not follow that mining was permitted within the Game Preserve merely because it may have been permissible within the Forest Reserve.
Neither the act authorizing the Game Preserve nor the proclamation creating it makes any specific reference to withdrawal of the lands from mineral entry.[2] Plaintiff argues that the withdrawal must be explicit, and that the absence of such a withdrawal means that mineral entry continued to be permissible. In support of this contention, the plaintiff cites an Interior Department opinion which states that authority to withdraw land
must be found in some provision of law which grants it or plainly recognizes it either by express terms or by inference so strong as to clearly indicate an intention to grant or recognize it.
*341 Authority to Withdraw Lands Within a Forest Reserve, 35 L.D. 262, 265 (1906).
The IBLA correctly held, however, that absence of an express provision withdrawing lands from mineral entry is not conclusive. The IBLA noted that a number of decisions make it clear that a statute or order may close land to mineral entry without expressly mentioning the mining laws. 70 IBLA at 269. One such decision is A. Jackson Birdsell, A-255440 (January 31, 1949). That case involved the Custer Park Game Sanctuary which was authorized by an act in 1920 which made no specific reference to the mining laws. Nonetheless, it was held that the establishment of the game sanctuary resulted in the withdrawal of the lands from mineral entry. The language of the act creating the Custer Sanctuary is very similar to that creating the Grand Canyon Game Preserve. Compare 41 Stat. 986 (June 5, 1920) with 34 Stat. 3263 (November 28, 1906). The Custer Sanctuary, later renamed Norbeck Wildlife Preserve, was recognized by Congress as closed to mineral entry when, in 1948, a statute was passed that specifically permitted mining, but with numerous restrictions. Act of June 24, 1941, as amended 16 U.S.C. § 678a (1976). Had the area been open to mining, it would not have been necessary to pass a statute permitting it.
The Birdsell court relied in part on the analysis in a 1941 decision concerning the applicability of mining laws to revested grant lands in Coos Bay, Oregon which were to be managed for permanent timber production. Applicability of Mining Laws to Revested Oregon and California Reconveyed Coos Bay Grant Lands, 57 I.D. 365 (1941) (hereinafter Instructions). The department noted in that case that the purpose of the legislation could be thwarted by full exercise of rights under the mining laws. The IBLA decision herein relied on the following significant passage from the Instructions decision.
While the policy is well established that mineral lands are not to be sold or otherwise disposed of except by express provisions of law, the Department is not aware of any established or stable public policy that lands set aside for particular public uses and purposes under any acts of Congress, which neither expressly exclude nor include mineral lands, are to be construed as subject to the mineral land laws. To the contrary, in many instances public lands reserved or withdrawn for sundry public uses and purposes by acts or pursuant to acts of Congress which do not in terms expressly include mineral lands, and likewise lands reserved or withdrawn by the President by virtue of his inherent power, which contain no reference to mineral land, are not subject to the operation of the mineral land laws. Among these instances of reserves where mineral exploration, location and development are not expressly inhibited but are not permitted, may be mentioned military reservations (17 Op. Atty.Gen. 230); national monuments created under the act of June 8, 1906 (34 Stat. 225); Cameron vs. United States, 252 U.S. 450 [40 S.Ct. 410, 64 L.Ed. 659]. The various acts creating bird and game reserves (16 U.S.C. ch. 7) do not expressly forbid mineral location and entry or operations under the mineral land laws, nevertheless applications for permits under the General Leasing Act have been denied on such reserves where the operations would jeopardize or impair (J.D. Mell et al., 50 L.D. 308), or destroy (R.G. Folk, A. 20601, unreported, decided March 4, 1937) the usefulness of the reserve as a wildlife refuge. Mineral lands within withdrawals for stock-driveway purposes made under section 10 of the act of December 29, 1916 (39 Stat. 862), became subject to the mining laws under rules, regulations and restrictions provided by the act of January 29, 1929 (45 Stat. 1144). See 43 CFR 185.35. And likewise mineral land included in withdrawals for construction purposes under the reclamation act of June 17, 1902 (32 Stat. 388), were by the act of April 23, 1932 (47 Stat. 136), made subject to location and entry and patent under the mining laws in the discretion of the Secretary *342 where the rights of the United States would not be prejudiced, with reservation of such rights, ways and easements necessary to the protection of the irrigation interests.
While in the National Forest Act the Congress expressly opened the land to the miner, and other acts, such as the act of June 25, 1910 (36 Stat. 847), as amended by the act of August 24, 1912 (37 Stat. 497), opened the withdrawals made thereunder to the miner of metalliferous minerals, the acts creating the national parks in the public land States have closed the door to the miner in such parks. See 16 U.S.C. secs. 21 to 355, inclusive; Lindley on Mines, sec. 196. As to acts setting aside lands for particular public purposes which do not expressly extend or prohibit the operation of the mineral land laws, there is no sufficient basis for the presumption that the mineral land laws, unless there are express words of exclusion, extend to them. On the contrary, in all such cases the intent of Congress in that respect must be gathered from the act itself.
(emphasis supplied by the IBLA, 57 I.D. at 372-73).
To refute these cases, the plaintiff relies primarily on the argument that the language of the authorizing statute does not indicate an intention to withdraw the lands from mineral entry and cites instances where very specific language was used. E.g., 26 Stat. 478 (Sept. 25, 1890) (establishing Sequoia and General Grant National Parks). The inference that the plaintiff urges on the Court is that when Congress wanted to completely withdraw land from mineral entry it knew how to do so, and therefore this Court must assume that it meant to do something less in this case. In light of the above referenced case law, the IBLA was reasonable in rejecting this view.
The legislative history in this case is not very helpful in determining the intent of Congress. All the parties to this dispute rely on the legislative history of the authorizing acts in support of their positions. The available legislative history consists of brief House[3] and Senate[4] reports. H.R. *343 Rep. No. 4973, 59th Cong., 1st Sess. (1906); S.Rep. No. 1586, 59th Cong., 1st Sess. (1906). Like the Act itself, neither report directly addresses the subject of mineral entry. Plaintiff argues that the failure to mention it is indicative of a lack of intent to withdraw the lands. Furthermore, the House report, quoting a speech by President Roosevelt, specifically addresses other threats to wildlife including overgrazing and fire, but not mining. H.R.Rep. No. 4973 at 2. Again, the plaintiff argues that the exclusion should be taken to mean that neither the President nor Congress considered open mining any threat to the wild-life within the Preserve. Both reports also mention that setting aside part of the forest reserve would not impair it for any of the purposes for which it was already set apart. The plaintiff argues that this, by virtue of the Organic Act, includes mining. Even if mining was not prohibited within the forest reserves, it was hardly a use for which the forest reserves were set aside.
The IBLA opinion stresses that in looking for congressional intent on mineral entry, a court should consider the extent to which allowing mineral entry would frustrate the purposes that were addressed by Congress. 70 IBLA at 272. First, the *344 IBLA notes that it must be assumed that those miners making entry under the General Mining Laws of 1872 would take full advantage of the privileges provided thereby. Id. at 273. Entry under that law does not restrict the manner in which mining can be done and would result in eventual alienation of title from the government by patent. The IBLA noted that in instances where mining has been allowed in various wildlife areas around the country and within the Grand Canyon Game Preserve, it has been on a restrictive basis. Id.; see e.g., Act of June 24, 1941, as amended 16 U.S.C. § 678 (1976). The entry sought by the plaintiff would have no such restrictions and therefore is irreconciliable with the purpose of the Game Preserve. It does not make sense for the government to set side land for a particular purpose and thereafter permit piecemeal alienation of it. In other words, it is conceivable that multiple use could be made of the land, but it is impracticable when it would result in alienation of title.
The defendants and intervenors have included in the record substantial discussion and evidence about the potential adverse impact that mining could have on the wildlife population. There are affidavits from various experts that the mining activity that could result under the general mining laws with all the claims that have been filed could have a substantial adverse impact on the area.[5] This evidence is not very probative of the intent of Congress in establishing the Preserve. It does illustrate, however, the illogic of establishing a game preserve without limitation of general mining entry, and that can be used to infer that Congress would not have intended such a result. See, West Winds, Inc. v. M. v. Resolute, 720 F.2d 1097, 1101 (9th Cir.1983).
The plaintiff has also argued that if the statute and proclamation establishing the Game Preserve is considered to be ambiguous, then they should be interpreted by examining the application of it by the Interior Department in the years immediately following enactment. It is in this area of evidence that the decision of the Interior Department is entitled to the greatest deference. The IBLA is better equipped than this Court to evaluate the significance of prior agency action.
The plaintiff points out that a small number of mining patents for land located within the Game Preserve were issued in the years following the Preserve's establishment, and argues that these are evidence that the Interior Department officials issuing the patents believed, contemporaneously, that the land was open to mineral entry. Contemporaneous construction by the department is, of course, entitled to special deference. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). The plaintiff contends that "the Department of the Interior has the power and the duty to inquire into and to adjudicate all matters relating to the right of an applicant to receive a patent." 3 Am.L. of Mining, § 9.04 (Rocky Mountain Mineral Law Foundation, 1st Ed.1983). The defendants do not dispute this principle, but argue that the few patents issued in this case were the result of either administrative error or the result of valid pre-existing rights.[6] There is a factual dispute, not resolved by the IBLA, about whether it is possible for the patents issued within the Preserve to have been the result of pre-existing rights, but it is neither necessary nor appropriate for this Court to resolve that dispute at this time. It appears unlikely that the issue could ever be conclusively resolved.
In any event all the previously patented lands within the Preserve have been reacquired[7] so that the entire Preserve is a *345 contiguous and uninterrupted area to be managed for the benefit of wildlife. As noted by the IBLA, this suggests the futility of a policy that permits mineral entry and subsequent patenting only to have the government forced to reacquire the land to put it to the use for which it was originally set apart, and then to have it again subject to entry. 70 IBLA at 281.
As further evidence of a departmental belief that the Game Preserve was open to mineral entry, the plaintiff notes that in 1909 the Forest Service withdrew from mineral entry a one acre parcel within the Game Preserve for use as an administrative site. The plaintiff argues that the withdrawal would not have been necessary if the Game Preserve was already withdrawn from mineral entry. The defendants speculate that the withdrawal was accomplished as a routine administrative matter like many other withdrawals from forest service lands required for administrative sites and that the paperwork was merely copied without deletion of the portions relating to mineral entry. Furthermore, the mineral withdrawal was later determined to be unnecessary and was revoked. Tr. 237. The IBLA did not adopt the speculation of the defendants, but did not consider the withdrawal very probative, "as it indicates no conscious determination of its prior status." 70 IBLA at 280. This Court agrees, especially in light of the later revocation.
The plaintiff also noted that the public records in the Arizona State Office of the BLM showed the land within the Game Preserve as open to mineral entry until 1981. The Secretary claims that it was merely an error and that when the mistake was recognized the records were corrected to show an effective withdrawal date of 1906, the year the Preserve was established. The plaintiff was told of the mistake before it placed its claims. It does not advance a reliance argument. The IBLA noted that a mining claim located on withdrawn land is null and void even if the land records erroneously indicate that the land is open. See Rod Knight, 30 IBLA 224 (1977).
The plaintiff also relies on a 1941 letter from the Arizona BLM office indicating a belief that game preserves in general were open to mineral entry. That letter was equivocal at best, indicating that the inquirer should provide a specific location to be sure. Tr. 36. This letter is hardly probative of a departmental determination that mineral entry was permissible within the Grand Canyon Game Preserve.
In response to the items cited by the plaintiff as evidence of a departmental belief that the Game Preserve was open to mineral entry, the defendants cite a large amount of correspondence and official opinion that the Game Preserve is closed to mineral entry. The first record found showing that the matter of mineral entry within the Preserve was considered at any high level of the Department of Interior is in a letter from Assistant Secretary of the Interior Orme Lewis to the Director of Mineral Resources, State of Arizona. The letter, dated January 4, 1955, has not been located but was referred to by Mr. L.K. Louma, Field Solicitor of the BLM, in a later opinion. Tr. 85-86. The Assistant Secretary opined that the Game Preserve was not open to mineral entry. He relied on a 1938 opinion of the Attorney General that the Wichita National Game Preserve, established by nearly identical language contemporaneously with the Grand Canyon Game Preserve, was closed to mineral entry. 38 Op. Att'y Gen. 192. He also relied on the Birdsell opinion discussed supra. The Field Solicitor's opinion citing the Lewis letter reached the same conclusion. Tr. 85-86.
Other correspondence evidencing a departmental belief that the Game Preserve was withdrawn from mineral entry is found in Tr. 87-88, 89-90, 94, 182, 184-185, 199, 210-211, 226-227, 236-240, 244, 246-247, 251, 253 and 325. It can be fairly stated that both the Department of Interior (Bureau of Land Management) and the Forest Service have consistently maintained since at least 1930 that the Preserve is, and has *346 been, closed to mineral entry since its establishment in 1906.[8]
Conclusion
Despite the lack of specific reference to the mining laws in the authorizing legislation, this Court is persuaded that Congress would not set aside land for the purpose of wildlife protection without intending to protect that land from piecemeal alienation under the general mining laws. It is true that some mining has occurred within the Preserve throughout the decades since its establishment, but virtually none of that was under the General Mining Laws of 1872 resulting in alienation of title from the government. Evidence that the Game Preserve has been managed under the concept of multiple use is not evidence that open mining has been, or should be, allowed under the general mining laws. Other provisions in the law, such as mineral leasing, permit mining that can be controlled so as to minimize the impact on the purpose for which the land was set apart and does not result in alienation of title. Those few mining claims that were allowed to go to patent, whether by administrative oversight or otherwise, have been reacquired. Therefore, the decision of the IBLA is
AFFIRMED.
NOTES
[*] Donald P. Hodel, William Clark's successor as Secretary of the Interior, has been substituted as a party pursuant to F.R.Civ.P. 25(d)(1).
[1] 30 Stat. 35 (1897).
[2] Quoting largely from the authorizing act (34 Stat. 607), the proclamation said:
Whereas, it is provided by the Act of Congress, approved June twenty-ninth, nineteen hundred and six, entitled "An Act for the protection of wild animals in the Grand Canyon Forest Reserve," "That the President of the United States is hereby authorized to designate such areas in the Grand Canyon Forest Reserve as should, in his opinion, be set aside for the protection of game animals and be recognized as a breeding place therefor.
"Sec. 2. That when such areas have been designated as provided in section one of this Act, hunting, trapping, killing, or capturing of game animals upon the lands of the United States within the limits of said areas shall be unlawful, except under such regulations as may be prescribed from time to time by the Secretary of Agriculture; and any person violating such regulations or the provisions of this Act shall be deemed guilty of a misdemeanor, and shall, upon conviction in any United States court of competent jurisdiction, be fined in a sum not exceeding one thousand dollars, or by imprisonment for a period not exceeding one year, or shall suffer both fine and imprisonment, in the discretion of the court.
"Sec. 3. That it is the purpose of this Act to protect from trespass the public lands of the United States and the game animals which may be thereon, and not to interfere with the operation of the local game laws as affecting private, State, or Territorial lands";
And whereas, for the purpose of giving this Act effect, it appears desirable that a part of the Grand Canyon Forest Reserve be declared a Game Preserve;
Now, therefore, I, Theodore Roosevelt, President of the United States, by virtue of the power in me vested by the aforesaid Act of Congress, do hereby make known and proclaim that all those lands within the Grand Canyon Forest Reserve, lying north and west of the Colorado River, in the Territory of Arizona, are designated and set aside for the protection of game animals, and shall be recognized as a breeding place therefor, and that the hunting, trapping, killing or capturing of game animals upon the lands of the United States within the limits of said area is unlawful, except under such regulations as may be prescribed from time to time by the Secretary of Agriculture.
34 Stat. 3263 (1906).
[3] [H.R.Rep. No. 4973] (To accompany S. 2732)
The Committee on the Public Lands, to whom was referred Senate bill 2732, having had the same under consideration, respectfully submit the following report:
This bill is substantially in the same form as the act authorizing the designation of the Wichita Forest Reserve as a game refuge.
This land is all public land, is now in a state of reserve, and is protected by Federal custodians. To protect the animals and birds in this forest, as well as the forest itself, would therefore not involve additional expense.
It would be an advantage to all the people of that Territory and in no wise interfere with the use of the forest reserve. The Department of Agriculture could also obtain supplies there for purposes of propagation in other parts of the country.
The President in his message to Congress called attention to the propriety of making some havens of refuge for the surviving wild birds, game, and fish within these reserves. He said:
"Certain of the forest reserves should also be made preserves for the wild forest creatures. All of the reserves should be better protected from fires. Many of them need special protection because of the great injury done by live stock, above all by sheep. The increase in deer, elk, and other animals in the Yellowstone Park shows what may be expected when other mountain forests are properly protected by law and properly guarded. Some of these areas have been so denuded of surface vegetation by overgrazing that the ground-breeding birds, including grouse and quail, and many mammals, including deer, have been exterminated or driven away. At the same time the water-storing capacity of the surface has been decreased or destroyed, thus promoting floods in times of rain and diminishing the flow of streams between rains.
In cases where natural conditions have been restored for a few years, vegetation has again carpeted the ground, birds and deer are coming back, and hundreds of persons, especially from the immediate neighborhood, come each summer to enjoy the privilege of camping. Some at least of the forest reserves should afford perpetual protection to the native fauna and flora, safe havens of refuge to our rapidly diminishing wild animals of the larger kinds, and free camping grounds for the ever increasing numbers of men and women who have learned to find rest, health and recreation in the splendid forests and flower-clad meadows of our mountains. The forest reserves should be set apart forever for the use and benefit of our people as a whole and not sacrificed to the shortsighted greed of a few.
The forests are natural reservoirs. By restraining the streams in flood and replenishing them in drought they make possible the use of waters otherwise wasted. They prevent the soil from washing, and so protect the storage reservoirs from filling up with silt. Forest conservation is therefore an essential condition of water conservation."
The protection of game in this reserve will in no wise impair the use of the forest reserve for any of the uses to which it is already set apart, and will prevent the extermination of the small remains of harmless wild life now found therein.
Your committee recommends that the bill do pass without amendment.
[4] [S.Rep. No. 1586] (To accompany S. 2732)
The Committee on Forest Reservations and the Protection of Game, to whom was referred the bill (S. 2732) providing for the protection of wild animals in the Grand Canyon Forest Reserve, have examined the bill and herewith report the same with the recommendation that it be passed without amendment.
The Grand Canyon Forest Reserve has been set apart in northern Arizona. This tract of land is the only timbered portion of what is known as the Arizona Strip, north and west of the Colorado River. It can not be utilized for agricultural purposes, as there is not sufficient water available. It has been set apart as a permanent timber reserve.
The bill proposes to permit the President of the United States to designate as a game preserve for animals such part of the said reserve as in his opinion may be proper. In one of his messages the President asked that authority be given, as to all the forest reserves in the United States, for the Executive to designate areas thereof as havens of refuge for the small remaining portion of our game and birds. Thus far Congress has not enacted a general law on the subject.
The bill applies only to the Grand Canyon Forest Reserve, and no opposition thereto has been expressed from any part of the country affected thereby. The committee understand that the sentiment is unanimously in favor of this action, in that it will protect from hunters some suitable portion of that region, to be used as a refuge and breeding ground for game animals, which are being reduced in number by reason of having no such protection and whose existence it is beneficial to maintain.
The Grand Canyon Forest Reserve is so provided with natural facilities of protection that an area therein suitable for the purposes of this bill can be inclosed safely by 16 miles of fence in addition to natural barriers that now protect it on three sides. The Colorado and Kanab Creek now form impassable barriers on the east, west and south sides of an area on the north side of which high cliffs and 16 miles of fence would make an inclosure where game animals can be kept and protected.
The spot is ideal for buffalo, deer, and other wild game. The land is all public land, is in a state of reserve, and is protected by Federal custodians, so that in this regard the protection of animals in the forest will not involve additional expense. There will be no interference with the use of the forest reserve in respect to its general purpose while the establishment of such a game preserve in that place would be beneficial, both in aiding to provide the Department of Agriculture with supplies for purposes of propagation elsewhere and in being generally advantageous to the public interests so far as these are subserved by the protection and propagation of desirable species of game animals in the United States.
[5] The pleadings revealed that by the time these motions were filed, 2247 claims had been filed within the Preserve.
[6] The statutes and proclamations first establishing the forest reserve provided for the exclusion of pre-existing rights.
[7] There is no evidence in the record about how or why these parcels were reacquired.
[8] The plaintiff makes the argument that the government's position that the Preserve is closed is based on departmental confusion about the difference between a game refuge and a game preserve. The Wildlife Refuge System, as presently constituted, was created in 1966 when Congress passed an act consolidating many wildlife areas into one system for management. See 16 U.S.C. § 668dd. The Grand Canyon National Game Preserve is not part of that system. Lands within the Refuge System are clearly not open to mineral entry. 50 C.F.R. § 27.64. The plaintiff is undoubtedly correct that the rules governing refuges should not be used to establish that the Preserve is closed. On the other hand, the fact that the Preserve is not part of the Refuge System is not evidence that it is open to mineral entry.
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Filed 4/24/13 In re Cynthia L. CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
In re CYNTHIA L., a Person Coming Under
the Juvenile Court Law.
THE PEOPLE, F064829
Plaintiff and Respondent, (Super. Ct. No. 510856)
v. OPINION
CYNTHIA L.,
Defendant and Appellant.
THE COURT*
APPEAL from a judgment of the Superior Court of Stanislaus County. Susan D.
Siefkin, Judge.
Suzanne M. Morris, under appointment by the Court of Appeal, for Defendant and
Appellant.
Kamala D. Harris, Attorney General, Dane R. Gillette, Chief Assistant Attorney
General, Michael P. Farrell, Assistant Attorney General, Louis M. Vasquez and Rebecca
Whitfield, Deputy Attorneys General, for Plaintiff and Respondent.
-ooOoo-
* Before Wiseman, Acting P.J., Poochigian, J., and Peña, J.
In July 2011, appellant, Cynthia L., a minor, pled no contest to a single count of
attempted first degree burglary (Pen. Code, §§ 459, 460, subd. (a), 664). In August 2011,
the juvenile court adjudged appellant a ward of the court and placed her on probation,
with various terms and conditions.
In April 2012, a supplemental wardship petition (Welf. & Inst. Code, § 777) was
filed in which it was alleged appellant committed multiple noncriminal violations of
probation; appellant admitted the allegations; and the court continued appellant as a ward
of the court and continued her on probation. Her conditions of probation included several
that refer to criminal street gangs that had not been previously imposed, including the
directive that she “not associate or communicate with any person that [she] know[s] is a
gang member ....”1
On appeal, appellant contends the gang association condition is unconstitutionally
overbroad. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND2
The Attempted Burglary
A detention report stated that according to a Modesto Police Department (MPD)
report, the victims of the offense told police the following occurred on November 2,
2010: “[Appellant] came to their front door and they thought she was soliciting so they
did not answer the door. A short time later, [appellant’s] father Jose was attempting to
break the glass on the back door to gain entry. Once Jose saw the victims in the
residence he fled.”
1 We refer to this condition of probation as the “gang association condition.”
2 Except as otherwise indicated, all information in this section is taken from the
dispositional social study filed April 19, 2012.
2
The Instant Probation Violations
The conditions of probation imposed following appellant’s adjudication of
attempted burglary included the following: She was to (1) attend school, (2) be in her
home between the hours of 9:00 p.m. and 6:00 a.m. unless in the company of her parents,
and (3) complete 15 hours of community service by March 27, 2012.
“According to school records from the Peterson Alternative Center Education
(PACE) dated April 5, 2012, [appellant] was dropped from enrollment on March 22,
2012, due to excessive absences.”
On March 12, 2012, a probation officer made contact with appellant’s mother at
appellant’s last known address. Appellant’s mother told the officer she “had not seen
[appellant] ‘in a while.’” Appellant was arrested at another location on April 4, 2012.
She told the officer she had been staying at that location with a friend for approximately
one month.
On March 13, 2012, the “coordinator of community service” informed the
probation officer that numerous attempts to set up an appointment with appellant “to sign
[her] up for her community service hours” had been unsuccessful, and appellant had “not
submitted proof of completion of community service.”
Additional Background
At the time of the disposition hearing in April 2012, appellant, then 17 years old,
was approximately eight months pregnant. The “presumed biological father” of the then-
unborn child is appellant’s boyfriend, K.S. (K.).
With regard to “peer influence and associations,” appellant told the probation
officer “she only has one friend and would just ‘hang out’ with [K.],” and she “is aware
[K.] is not a good influence on her as he is on probation and is currently incarcerated in
3
juvenile hall.”3 Appellant “denied ever associating with a gang.” She told the probation
officer, “‘My mom’s side of the family are Northerners and my dad’s side of the family
are Southerners.’” She also stated that both her father and her brother are “involved with
Northern and Southern gangs.” An MPD report stated that appellant’s father, during the
booking process following his arrest for the attempted burglary discussed above, stated
he was a “Southerner,” and that he was “classified as such and placed with people of
similar gang affiliation.”
Appellant’s mother told the probation officer the following: Appellant “has a lot
of friends” who are “Northerners.” Appellant “is not a member ... but she does hang out
with them.” Appellant “‘has Northerner songs on [her mother’s] phone.’” Appellant’s
mother “‘didn’t allow her to wear red over here.’” Appellant “was doing good” on
probation; she “wasn’t out there getting into trouble.” However, “once [K.] got out, it
was all about [K.]”
The Disposition Hearing4
The court noted that gang conditions had not previously been imposed, at which
point the following exchange occurred:
“THE COURT: Is there a basis for ordering [gang conditions] now?
“[Appellant]: My boyfriend.
“MS. VARNER [probation officer]: By association. So her boyfriend, the father
of the child.”
Appellant confirmed, “... my boyfriend is a gang member.”
Defense counsel objected to the gang conditions.
3 The probation officer noted that K. had been adjudicated a ward of the court, and
that on April 17, 2012, he was ordered to serve 270 days in juvenile hall.
4 Information in this section is taken from the transcript of the April 2012
disposition hearing.
4
DISCUSSION
Appellant contends the gang association condition is unconstitutionally overbroad
because, she asserts, it (1) impinges on her constitutional rights to freedom of association
and assembly, (2) is not “reasonably related to present or future delinquent conduct,” and
(3) is not “narrowly tailored to the reason for the restriction or appellant’s individual
needs.” (Boldface omitted.)
Legal Background
Welfare and Institutions Code section 730 provides, in relevant part: “The
[juvenile] court may impose and require any and all reasonable conditions [of probation]
that it may determine fitting and proper to the end that justice may be done and the
reformation and rehabilitation of the ward enhanced.” “[J]uvenile probation conditions
must be judged by the same three-part standard applied to adult probation conditions
under [People v.] Lent [(1975)] 15 Cal.3d 481: ‘A condition of probation will not be held
invalid unless it “(1) has no relationship to the crime of which the offender was
convicted, (2) relates to conduct which is not in itself criminal, and (3) requires or forbids
conduct which is not reasonably related to future criminality ....” [Citations.]’” (In re
D.G. (2010) 187 Cal.App.4th 47, 52-53.) Under this test, “All three requirements must
be met before the condition is invalidated.” (In re Frank V. (1991) 233 Cal.App.3d 1232,
1242.)
“The juvenile court has wide discretion to select appropriate conditions ....” (In re
Sheena K. (2007) 40 Cal.4th 875, 889 (Sheena K.).) “Although the goal of both [juvenile
and adult] probation is the rehabilitation of the offender, ‘[j]uvenile probation is not, as
with an adult, an act of leniency in lieu of statutory punishment; it is an ingredient of a
final order for the minor’s reformation and rehabilitation.’ [Citation.] ... [¶] In light of
this difference, a condition of probation that would be unconstitutional or otherwise
improper for an adult probationer may be permissible for a minor under the supervision
5
of the juvenile court.” (In re Tyrell J. (1994) 8 Cal.4th 68, 81, overruled on other
grounds by In re Jaime P. (2006) 40 Cal.4th 128, 139.)
However, a court’s discretion is not boundless. “‘“‘Where a condition of
probation requires a waiver of precious constitutional rights, the condition must be
narrowly drawn....’”’” (In re Frank V., supra, 233 Cal.App.3d at p. 1242.) “A probation
condition that imposes limitations on a person’s constitutional rights must closely tailor
those limitations to the purpose of the condition to avoid being invalidated as
unconstitutionally overbroad.” (Sheena K., supra, 40 Cal.4th at p. 890.) “A restriction is
unconstitutionally overbroad ... if it (1) ‘impinge[s] on constitutional rights,’ and (2) is
not ‘tailored carefully and reasonably related to the compelling state interest in
reformation and rehabilitation.’ [Citations.] The essential question in an overbreadth
challenge is the closeness of the fit between the legitimate purpose of the restriction and
the burden it imposes on the defendant’s constitutional rights—bearing in mind, of
course, that perfection in such matters is impossible, and that practical necessity will
justify some infringement.” (In re E.O. (2010) 188 Cal.App.4th 1149, 1153 (E.O.).)
Analysis
As indicated above, appellant’s constitutional overbreadth challenge to the gang
association condition is premised on three claims, viz., the claims that the condition (1)
impinges on constitutional rights, (2) is not reasonably related to present or future
delinquent conduct, and (3) is not sufficiently narrowly drawn. The first of these is
correct. As the People effectively concede, the gang association condition impinges on
appellant’s First Amendment rights of association and assembly. However, appellant’s
remaining two points, which we address in turn, are not well taken.
Relation of Gang Association Condition to Present and Future Criminality
Appellant contends the gang association condition “is not reasonably related to
present or future delinquent conduct” because there was no indication that either the
6
underlying attempted burglary or appellant’s subsequent misconduct were “gang related
or influenced” or “the product of gang associations.” (Boldface omitted.)
We assume without deciding that neither the instant offense nor appellant’s
probation violations were gang related, and that therefore the gang association condition
is not reasonably related to present delinquent conduct, but as we explain below, we
conclude the challenged condition is reasonably related to future criminality. On this
point, we find instructive In re Laylah K. (1991) 229 Cal.App.3d 1496 (Laylah K.).
In that case, two minors were adjudicated of various offenses based on an incident
in which the minors, who had friends who were members of the Crips gang, accosted a
woman on the street, demanded to know why she was wearing an article of red
clothing—red being a color associated with a rival gang—and challenged her to fight.
The minors argued that they were not gang members and therefore, the “‘Gang Terms
and Conditions of Probation’” (Laylah K., supra, 229 Cal.App.3d at p. 1499) imposed
there, which included a condition prohibiting the minors from “associat[ing] with known
members of the Crips gang” (ibid.), “were not reasonably related to their crimes or their
rehabilitation” (id. at p. 1500) and therefore were invalid under People v. Lent, supra, 15
Cal.3d 481 (Lent).5 The court rejected the minors’ contentions. The court concluded that
5 We note that whether a probation condition is invalid under Lent, and whether a
condition is unconstitutionally overbroad, are separate questions. Appellant, however,
frames her constitutional overbreadth argument in terms of the Lent standard for
determining the validity of the probation condition. That is, she frames the issue in terms
of whether the challenged condition is reasonably related to future criminality. (See Lent,
supra, 15 Cal.3d at p. 486.) The constitutional test for overbreadth, on the other hand, as
phrased somewhat differently in E.O., supra, 188 Cal.App.4th at p. 1153, requires
consideration of whether the probation condition at issue is, in addition to being narrowly
tailored, “‘reasonably related to the compelling state interest in reformation and
rehabilitation.’” (Italics added.) In our view, in order for a probation condition to be
reasonably related to a minor’s reformation and rehabilitation, it must also be reasonably
related to present or future criminality. Therefore, Laylah K.’s response to the Lent-based
argument raised there is instructive on the constitutional argument we address here.
7
the minors, “[i]f they were not already entrenched in the gang, they were well on their
way[,]” based, in part, on the following: Both minors “admitted they had friends who
were members of the Crips gang[,]” including another minor who was with the minors in
committing the adjudicated offenses; a family member opined that the minors were
“‘gang associates’”; and the probation officer concluded that the minors, in committing
the adjudicated offenses, “participated in an apparent defense of what they perceived to
be a symbolic challenge to Crips’ territorialism.” (Laylah K., at pp. 1500-1501.)
The court stated further: “The minors’ contention that mere association with gang
members does not justify terms aimed at known gang members is extremely shortsighted.
Association with gang members is the first step to involvement in gang activity.... [¶]
This court has previously held that probation conditions designed to curb dangerous
associations with gangs were not unreasonable. (In re Michael D. (1989) 214 Cal.App.3d
1610, 1617.) While Michael D. had admitted gang affiliations, we see no logical or
beneficial reason to require a court to wait until a minor has become entrenched with a
gang, only then to apply mere prophylactic remedies. [¶] ... [¶] … Evidence of current
gang membership is not a prerequisite to imposition of conditions designed to steer
minors from [the] destructive path [of gang membership].” (Laylah K., supra, 229
Cal.App.3d at pp. 1501-1502.)
We recognize that the minors in Laylah K. exhibited a greater involvement in and
identification with a gang than that shown by appellant. However, by the same token, the
record here indicates appellant’s relationship to a criminal street gang went beyond
simply associating with persons who happened to be gang members. The record contains
evidence that appellant had placed “gang songs,” i.e., presumably, songs having a special
significance to gang members, on her mother’s telephone. Such an act indicates some
interest, if not actual involvement, in gang activity. Based on this act, considered in
conjunction with the evidence that appellant had, and associated with, gang member
8
friends, the court reasonably could conclude that appellant, though not in the same degree
of imminent danger of “succumbing to gang pressures” (Laylah K., supra, 229
Cal.App.3d at p. 1501) as the minors in Laylah K., was, at least slightly, moving in that
direction. As in Laylah K., the court was not required to wait further before imposing
conditions designed to “steer [her] from [the] destructive path [of gang membership].”
(Id. at p. 1502.) On this record, the gang association condition was reasonably related to
the prevention of future criminal behavior, and therefore also reasonably related to “‘the
compelling state interest in reformation and rehabilitation.’” (E.O., supra, 188
Cal.App.4th at p. 1153.)
Overbreadth
Appellant contends the gang association condition was “not narrowly tailored to
address [her] unique needs” because it would prevent contact with her father, her brother,
the father of her soon-to-be-born child, at a time when, given that she was soon to give
birth, contact with such persons is particularly important to appellant.
The factors cited by appellant support what is not disputed: The gang condition
impinges on important constitutional rights. However, these factors do not establish that
the challenged condition imposes limitations on constitutional rights that are not “closely
tailor[ed] ... to the purpose of the condition ....” (Sheena K., supra, 40 Cal.4th at p. 890.)
Here, the purpose of the condition is to foster appellant’s rehabilitation and to protect
public safety by preventing appellant, who, as demonstrated above, has associated with
gang member friends and has shown an interest in gang culture, from going any further
down the path to gang involvement. A condition directed at preventing gang
involvement that accomplishes this aim by prohibiting association with gang members is
carefully tailored to its purpose. It is not overbroad.
DISPOSITION
The judgment is affirmed.
9
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297 F.3d 924
UNITED STATES of America, Plaintiff-Appellee,v.Antonio HINOSTROZA, Defendant-Appellant.
No. 01-10482.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted June 10, 2002.
Filed July 23, 2002.
COPYRIGHT MATERIAL OMITTED Petra M. Reinecke (argued) and Brian H. Getz, Law Offices of Brian H. Getz, San Francisco, CA, for the defendant-appellant.
W. Douglas Sprague (argued), Assistant U.S. Attorney, Sacramento, CA, for the plaintiff-appellee.
Appeal from the United States District Court for the Eastern District of California, William B. Shubb, District Judge, Presiding.
Before GOODWIN, HAWKINS and RAYMOND C. FISHER, Circuit Judges.
OPINION
MICHAEL DALY HAWKINS, Circuit Judge.
Introduction
1
Defendant-Appellant Antonio Hinostroza ("Hinostroza") appeals his conviction and sentence for possession of firearms by a person subject to a restraining order and for making false statements on a firearms application. He first alleges that his firearms-possession conviction violates the Second Amendment as an unreasonable regulation of his individual right to bear arms. He next claims that the district court abused its discretion by admitting evidence of uncharged allegedly false statements that he made. Finally, he contends that the district court clearly erred by enhancing his sentence based on a finding of obstruction of justice. For the reasons we set out below, we affirm the district court's judgment.
Factual and Procedural Background
2
Hinostroza has lived in the United States for thirty-one years, twelve as a citizen. Throughout he has been legitimately employed and, up until this case, had no record of arrests or convictions. He maintains he was an avid hunter and outdoorsman, and had numerous firearms. Hinostroza was married to Lucia Hinostroza ("Lucia") until 1997, whereupon they separated and later went through acrimonious divorce proceedings. Alleging that Hinostroza's past violence to her put her in fear, Lucia obtained a restraining order against Hinostroza in August 1997. The order was granted but it made no specific findings regarding the truth of Lucia's allegations nor did it state that Hinostroza was a future threat to her. Nearly two years later, in August 1999, Hinostroza tried to persuade the court to dissolve the order so that he could own or possess a firearm in pursuit of his hunting and collecting activities. He failed. Nonetheless, he acquired firearms in September and October 1999, stating on his applications that he was not under a restraining order.1
3
Earlier in the year, on three separate occasions in the spring of 1999, Hinostroza had similarly stated on firearms applications that he was not the subject of a restraining order. Those statements are the basis for three of the five counts in the district court proceedings. The two other counts are for possession of firearms while subject to a restraining order. Those counts stem from a search of Hinostroza's residence and truck on June 28, 2000.2 The police found four firearms in the truck and four more in the house.
4
In an in limine motion, Hinostroza sought to exclude the two false statements from September and October of 1999. That motion was denied. At trial, Carmen Torres, Hinostroza's fiancee, appeared as a defense witness and testified that the weapons found in the truck and home were really hers. Torres explained that the day before the search, she had placed the firearms where the agents found them, unbeknownst to Hinostroza. She claimed she had placed them there because she was soon leaving to Mexico with her younger sons and did not want to leave the guns in her house while her older teenage son was there. Thus, according to her testimony, Hinostroza could not have known about the location of the guns, and therefore could not have knowingly possessed them.
5
The jury thought otherwise. At his sentencing hearing, Hinostroza testified that he possessed the firearms solely for hunting or collection, and therefore, he requested that his base offense level be reduced under the sentencing guidelines. The district court denied his request, and found Hinostroza's testimony at the sentencing hearing willfully false about a material matter, thus imposing on him an enhancement for obstructing justice. In total, he was sentenced to thirty-three months of imprisonment.
Analysis
1. The Second Amendment
6
This Court reviews constitutional challenges to statutes de novo. United States v. Kaluna, 192 F.3d 1188, 1193 (9th Cir.1999) (en banc). Hinostroza argues that this Court should reverse his conviction because it violates his individual rights under the Second Amendment by prohibiting him from possessing firearms without specific findings that he was a threat to his former wife, Lucia.3 As support, he points to the recent Fifth Circuit conclusion in United States v. Emerson, 270 F.3d 203 (5th Cir.2001), that the Second Amendment protects an individual right to bear arms. Hinostroza's argument is foreclosed by our prior holding that the Second Amendment only confers upon states a collective right to bear arms. See Hickman v. Block, 81 F.3d 98, 101 (9th Cir. 1996); see also Morton v. De Oliveira, 984 F.2d 289, 292 (9th Cir.1993) ("[O]nly the court sitting en banc may overrule a prior decision of the court."). We therefore reject Hinostroza's Second Amendment challenge.
7
2. Admission of Dismissed Alleged False Statements
8
Hinostroza next contests the district court's admission of the two allegedly false statements on firearms applications from September and October 1999, arguing that it was error because the evidence was irrelevant and prejudicial. The statements were irrelevant, he claims, because they occurred after the false statements that are the basis of Counts Three, Four and Five in this case. Because these later statements were after the false statements at issue here, the later statements could not have affected the likelihood that the fact-finder would determine that the prior statements were false, that Hinostroza knew the statements to be false, or that the statements were intended to deceive. Instead, he argues, their admission was purely cumulative and prejudicial because it had "the prohibited effect of indicating to the jury that the defendant is a bad person, or that if he similarly filled out five applications, he must have known his statement to be false."
9
The defendant's argument that subsequent Rule 404(b) evidence is irrelevant, and therefore inadmissible, is unpersuasive. Hinostroza never really addresses the main contention of the government: that the later statements are probative of his intent and knowledge when he falsely answered the same question three times in the spring of 1999. The timing of these later statements does not make them less relevant. Moreover, our precedent has squarely resolved in the government's favor the issue that subsequent Rule 404(b) evidence may be relevant and admissible. United States v. Bibo-Rodriguez, 922 F.2d 1398, 1400 (9th Cir.1991) ("[W]e decline to follow [those] courts which have disallowed subsequent `other act' evidence to prove knowledge. By its very terms, 404(b) does not distinguish between `prior' and `subsequent' acts.") (citations omitted). The only time such evidence may be excluded by Rule 404 is if the evidence "tends to prove only criminal disposition." United States v. Ayers, 924 F.2d 1468, 1473 (9th Cir. 1991) (quoting United States v. Sangrey, 586 F.2d 1312, 1314 (9th Cir.1978)). With respect to the false statements counts, the subsequent acts show intent, perhaps a common plan to gather more firearms, and an absence of mistake or accident.4 Furthermore, it is not only counterintuitive but also implausible to suggest, as Hinostroza does, that the very fact that the uncharged false statements are the same type of act as those charged should be their undoing for purposes of admissibility. It is precisely the similarity of subsequent Rule 404(b) acts that increases, not decreases, their probative nature and their relevance in showing knowledge, intent or modus operandi. The government's logic is compelling: that Hinostroza acquired firearms shortly after a judge denied his motion to dissolve the restraining order is probative of the defendant's knowledge that his earlier attempts were based on false statements as well.5
10
Moreover, the evidence of the uncharged false statements is admissible as direct evidence for the counts of unlawful firearms possession, as one of the guns seized in June 2000 was one of the guns he applied for in September 1999. As the government correctly argues, evidence of the defendant's prior possession of the contraband is admissible for showing the defendant's knowledge that he possessed the contraband at the later date. See Wright v. United States, 192 F.2d 595, 597 (9th Cir.1951). While it is true the false statements of September 1999 do not prove Hinostroza's acquisition or possession of the weapon, they do suggest it strongly, rendering the evidence admissible.
11
In short, the district court did not abuse its discretion in admitting the evidence of the uncharged false statements. Any resulting prejudice was ameliorated by the limiting instruction given the jury, an instruction acceded to by the defense.
3. The Obstruction of Justice Enhancement
12
We review for clear error a district court's decision that a defendant obstructed justice. United States v. Morgan, 238 F.3d 1180, 1187 (9th Cir.2001). Once such a finding occurs, the Sentencing Guidelines (Section 3C1.1) require an enhancement of the penalty. United States v. Dunnigan, 507 U.S. 87, 98, 113 S.Ct. 1111, 122 L.Ed.2d 445 (1993). The elements of an obstruction penalty for perjurious testimony require the court to find that the defendant gave false testimony on a material matter with willful intent. United States v. Robinson, 63 F.3d 889, 892 (9th Cir.1995).
13
The government mistakenly builds an argument around the theory that Hinostroza suborned Torres's "preposterous" testimony. The district court, though, did not ground its obstruction finding on that issue; rather, its decision was based on the defendant's testimony at the sentencing hearing. To that we turn.
14
Hinostroza begins by arguing that the government failed to prove and the district court failed to find that the false testimony was willful. The transcript of the evidentiary hearing, however, reveals the district court judge to have been "affront[ed]" by the testimony's patent falsity. Indeed, the court noted that defendant "got up here at the sentencing hearing and committed perjury himself." The court's finding of perjury a fortiori includes a finding of mens rea, so the defendant cannot plausibly argue that the record is devoid of any findings of mens rea here.
15
The real issue is materiality.6 Hinostroza notes that the evidentiary hearing for the sentencing was limited to the issue of whether he should receive a downward departure under Section 2K2.1(b)(2) of the Sentencing Guidelines because the weapons were possessed solely for lawful sporting purposes or collection. Because of this limited purpose, he argues that the testimony that the court viewed as the basis for the obstruction could not have been material.
16
The government disputes this, contending that Hinostroza's testimony about his knowledge of the location of the guns was material to the length of his sentence. First, the government argues that asking Hinostroza about whether he admitted possessing the guns was germane to asking him what purpose they served. Second, the government claims that eliciting what seems like implausible testimony about how the guns got where they were is material to determining why the hunting/collection adjustment should not attach here: if that implausible testimony is deemed false, then it is more likely that Hinostroza himself put the guns where they were found, and it becomes less plausible to believe that the guns, some of which were found within arm's reach of the bed, were possessed solely for hunting or collection purposes.
17
Hinostroza's testimony that he did not know how the loaded weapons got next to his bedside, on top of his television set, in his closet and in the truck he was driving was material to the sentencing determination. If the district court believed Hinostroza, it would have supported Hinostroza's contention that the weapons were possessed for hunting and collection purposes. If the court disbelieved Hinostroza, leading the court to conclude that Hinostroza purposefully kept the weapons in the locations they were discovered by law enforcement officers, then it was less likely that the weapons qualified for the sentence reduction. This is so because the location of weapons constitutes pertinent evidence of whether they are used solely for sporting and collection. See U.S.S.G. § 2K2.1(b)(2) application note 10 ("Under subsection (b)(2), `lawful sporting purposes or collection' as determined by the surrounding circumstances, provides for a reduction to a offense level of 6. Relevant surrounding circumstances include ... the location and circumstances of possession and actual use[.]"); see also United States v. Uzelac, 921 F.2d 204, 206 (9th Cir.1990) ("The shotgun was kept fully loaded while it was on the display rack, a condition perhaps more consistent with use for personal protection than use as a hunting weapon."). If the court believed that Hinostroza did not know how the weapons got to the locations, it could have led the court to conclude that the weapons were kept for sporting and collection purposes.
18
Our holding has limits, as we recognize that there are times when a pre-sentence, post-jury verdict assertion will not be material to sentencing. Hinostroza in fact points us to United States v. Gardiner, 955 F.2d 1492, 1499 (11th Cir.1992) ("We conclude as a matter of law that the defendant's assertion cannot be material to sentencing if the assertion's truth requires the jury's verdict to be in error."). The rule announced in Gardiner does not negate the materiality of Hinostroza's false testimony at sentencing, however, because that testimony is not incompatible with the jury verdict. The jury could have convicted Hinostroza of possessing each of the weapons while simultaneously concluding that he did not place them in the locations in which they were found. Gardiner, therefore, does not affect our conclusion that Hinostroza's testimony was material.
Conclusion
19
The district court's conviction and sentence of Hinostroza is AFFIRMED.
Notes:
1
Hinostroza was indicted in the Northern District of California for these two false statements on firearms applications but that indictment was dismissed after the conviction in this case
2
The truck, however, was registered to Hinostroza's fiancee, Carmen Torres
3
While this Court has not previously considered the constitutionality of 18 U.S.C. § 922(g)(8) on Second Amendment grounds, it has heard and rejected challenges based on the Due Process Clause, the Commerce Clause and the Tenth AmendmentSee United States v. Jones, 231 F.3d 508, 513-15 (9th Cir.2000) (Due Process Clause, Commerce Clause and Tenth Amendment); United States v. Rousseau, 257 F.3d 925, 932 (9th Cir.2001) (Commerce Clause).
4
We agree with the government that the subsequent acts here were not too remote in time from the crimes alleged in the indictment. InUnited States v. Arambula-Ruiz, 987 F.2d 599, 603-04 (9th Cir.1993), this Court noted that prior decisions held that "a conviction which occurred five years prior to the charge at issue was not too remote," and the facts of this case do not dictate a different result.
5
We typically consider the following factors in determining whether evidence of prior bad acts was properly admitted under Rule 404(b). The evidence must prove a material element of the offense for which the defendant is now charged; in certain cases, the conduct must be similar to the charged conduct; proof of the conduct must be based upon sufficient evidence; and the conduct must not be too remote in timeUnited States v. Houser, 929 F.2d 1369, 1373 (9th Cir.1990). Finally, in addition to these requirements, the evidence is subject to Rule 403. Id. We think the district court acted within its discretion in determining that the proffered testimony satisfied this multi-factor test and Rule 403.
6
Material evidence or information means information that, if believed, would tend to influence or affect the issue under determination. U.S. Sentencing Guidelines Manual § 3C1.1 application note 6 (2001)
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125 F.2d 401 (1942)
HELVERING, Com'rs of Internal Revenue,
v.
UNION TRUST CO. OF DISTRICT OF COLUMBIA.
No. 4878.
Circuit Court of Appeals, Fourth Circuit.
January 29, 1942.
Joseph M. Jones, Sp. Asst. to Atty. Gen. (Samuel O. Clark, Jr., Asst. Atty. Gen., and J. Louis Monarch, Sp. Asst. to Atty. Gen., on the brief), for petitioner.
George E. Hamilton, Jr., and Leo N. McGuire, both of Washington, D. C. (George E. Hamilton, John J. Hamilton, and Henry R. Gower, all of Washington, D. C., on the brief), for respondent.
Before PARKER, SOPER and DOBIE, Circuit Judges.
SOPER, Circuit Judge.
This petition for review involves a determination by the Commissioner of Internal Revenue of a deficiency in estate tax of $39,390.05 against the estate of Carolyn *402 G. Caughey, a former resident of the District of Columbia, who died on July 24, 1936. The Board of Tax Appeals set aside the determination and found a deficiency of only $34.21, holding that for the purpose of the tax the value of certain bequests in the will of the testatrix should be deducted from the value of the gross estate as bequests to a corporation organized and operated exclusively for charitable purposes. It is agreed that the legatee in question was such a corporation, but it is contended that the value of the bequests was not ascertainable at the death of the testatrix, and that they were conditioned upon the happening of events after her death, that might or might not occur, and therefore the deduction claimed by the executor of the estate should not have been allowed.
The statute and regulations involved are as follows:
Revenue Act of 1926, c. 27, 44 Stat. 9 U.S.C. Title 26, Sec. 412, 26 U.S.C.A. Int. Rev.Acts, page 232.
"Sec. 303. For the purpose of the tax the value of the net estate shall be determined
"(a) In the case of a resident, by deducting from the value of the gross estate
* * * * * * *
"(3) The amount of all bequests, legacies, devises, or transfers * * * to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, * * *."
Treasury Regulations 80 (1934 Ed.)
"Art. 47. Conditional Bequests. If the transfer is dependent upon the performance of some act or the happening of some event in order to become effective, it is necessary that the performance of the act or the occurrence of the event shall have taken place before the deduction can be allowed.
"If the legatee, devisee, donee, or trustee is empowered to divert the property or fund, in whole or in part, to a use or purpose which would have rendered it, to the extent that it is subject to such power, not deductible had it been directly so bequeathed, devised or given by the decedent, deduction will be limited to that portion, if any, of the property or fund which is exempt from an exercise of such power."
By her will dated June 18, 1936, the decedent devised and bequeathed the residue of her estate to a trustee, to pay the net income therefrom to her husband for life or until he should remarry, the payments to begin immediately upon her death, with direction to the trustee to contribute from the corpus of the estate additional sums for the proper care and comfort of the husband, should illness, accident or misfortune so require. The husband was 76 years of age at decedent's death and had a life expectancy of 6.11 years. In addition to the net income from the residuary estate, the husband was granted the exclusive use of the home property in Washington, where he has resided since his wife's death.
The will directed the trustee to convey the decedent's country home, called Rockwood Manor, to the National Girl Scouts, Inc., to be utilized as a character building center, two rooms and bath being reserved for the husband should he wish to go there and rest. The devise of this property was made subject to the condition that should the National Girl Scouts, Inc., abandon the property or close it so as not to be used as a means of character building or help to the cause, then the property should go to the officers or trustees of the Esther Chapter of the Eastern Star for their good work and use. Pursuant to this provision, Rockwood Manor was conveyed to National Girl Scouts, Inc., sometimes referred to herein as Girl Scouts, by the trustee by deed dated January 21, 1938, and has been occupied by that organization continuously since that time. No other assets of the estate have ever been transferred to the Girl Scouts.
The will further provided that upon the death or remarriage of the husband, all the other real estate of the decedent and the furniture in the Washington residence should be sold, and that one-half of the net proceeds of sale, together with one-half of the remaining personal property of the decedent, should be paid by the trustee to the Girl Scouts, if they should be still operating Rockwood Manor, the funds so paid over to them to be used in the development and improvement of the property and not in the paying of salaries to officers; and if at that time the Girl Scouts should have abandoned the property or were not using it for the character building purposes, then the trustee should pay over the fund to the Esther Chapter of the Eastern Star.
The trustee was directed to hold the remaining one-half of the net proceeds of sale and the remaining one-half of the personal property for the period of twenty *403 years after the death of the husband, and at the end of that period, to pay over the entire remaining estate to the Girl Scouts, if they should then be in possession of Rockwood Manor, or to the Esther Chapter of the Eastern Star if they be then in possession of Rockwood Manor.
It was stipulated that the National Girl Scouts, Inc., is a domestic corporation, organized and operated solely for one or more of the purposes enumerated in Section 303 (a)(3) of the Revenue Act of 1926, as amended, and that the Esther Chapter of the Eastern Star is not such an organization.
The residuary estate was valued at more than $310,000, and the income therefrom during the period of three and a half years after the decedent's death varied from $8,000 to $10,000 per year, while the expenses of the husband approximated $4,000 per year. By the decision of the Board, three members dissenting, a deduction from the value of the gross estate was allowed for the value of Rockwood Manor in the amount of $38,375. plus the value at the date of decedent's death of the remainder of the estate after termination of the trust, computed by the use of mortality tables. The Commissioner does not dispute the deductibility of the value of Rockwood Manor, but contests the deductibility of the value of the remainder of the estate.
The rule of law as to the deductibility of such charitable bequests as are under consideration in this case is free from doubt. It is well established that a bequest to a corporation organized for charitable purposes is not deductible unless the bequest is unconditionally made and the amount is definitely ascertainable at the death of the decedent. Humes v. United States, 276 U.S. 487, 48 S.Ct. 347, 72 L. Ed. 667; Ithaca Trust Co. v. United States, 279 U.S. 151, 49 S.Ct. 291, 73 L.Ed. 647; United States v. Provident Trust Co., 291 U.S. 272, 54 S.Ct. 389, 78 L.Ed. 793; First National Bank of Birmingham v. Snead, 5 Cir., 24 F.2d 186; Delaware Trust Co. v. Handy, D.C. Del., 53 F.2d 1042; St. Louis Union Trust Co. v. Burnet, 8 Cir., 59 F.2d 922; Gammons v. Hassett, 1 Cir., 121 F.2d 229; United States v. Fourth National Bank, 10 Cir., 83 F.2d 85 and cases cited.
It seems to be clear that the bequests now under consideration do not satisfy these requirements. It is noticeable, first of all, that the amount of that one-half of the residuary estate to be transferred to the legatee at the husband's death is somewhat uncertain, because the will directs that if illness, accident or misfortune should require more than the net income monthly for the proper care and comfort of the husband, the trustee shall contribute such additional sum from the corpus as will satisfy the need. It is suggested, not without reason, that the provision in the will for the use of the residence in Washington by the husband and the gift to him in addition of a substantial annual income greatly in excess of his needs reduces to a minimum the probability that any part of the corpus will ever be expended for his benefit. The decided cases indicate that the mere possession of power by a trustee under a will to use a part of the principal of a trust estate for the maintenance of the beneficiary of the life estate will not of itself destroy the deductibility of a charitable bequest of the remainder, if the amount of the corpus that may be so used is capable of being stated in definite terms of money, so that the amount of the remainder given to charity is fixed and therefore capable of deduction from the gross estate. A comparison of two of the cases which are at opposite extremes illustrates the application of the rule. In Ithaca Trust Co. v. United States, 279 U.S. 151, 49 S.Ct. 291, 73 L.Ed. 647, the value of the residuary estate was held to be deductible although the will allowed the wife of the testator the use from the principal of any sum that might be necessary to suitably maintain her in the comfort to which she was accustomed. The court said (page 154 of 279 U.S., page 291 of 49 S.Ct., 73 L.Ed. 647): "* * * The principal that could be used was only so much as might be necessary to continue the comfort then enjoyed. The standard was fixed in fact and capable of being stated in definite terms of money. It was not left to the widow's discretion. The income of the estate at the death of the testator and even after debts and specific legacies had been paid was more than sufficient to maintain the widow as required. There was no uncertainty appreciably greater than the general uncertainty that attends human affairs."
On the other hand, it was held in Gammons v. Hassett, 1 Cir., 121 F.2d 229, that the value of the residuary estate was not deductible under a testamentary provision permitting the testator's wife to invade the corpus of the estate to the extent of so much of the principal thereof as the wife might at any time need or desire; and this *404 holding was made although the wife was 93 years of age at the death of the testator and the income from her own estate and from the trust estate under his will exceeded the amount required to maintain her customary standard of living.
If the permissible use of a part of the corpus of the trust estate to care for the husband in case of emergency was the only source of uncertainty in the pending case, we should hesitate to hold that the bequests of the residue are not deductible for estate tax purposes. But there is additional uncertainty. One-half of the residue is to be delivered to the Girl Scouts at the death of the husband only upon the condition that Rockwood Manor is then being used by them for character building purposes. Whether the organization will have been able in the interval of uncertain length between the death of the wife and the death of the husband to maintain and use this valuable country place for the purposes indicated is by no means certain, especially as the testatrix made no provision for maintenance or operating expenses. Nor did she provide for the operating expenses necessarily to be incurred after her husband's death, since she directed that the funds to be paid to the Girl Scouts upon that event should be used "in the development and improvement of the property and not in the paying of salaries of officers"; and this requirement adds another uncertainty for no one can be sure that the corporation will be willing at that time to accept a gift so restricted and undertake to operate the place upon the lines laid down in the decedent's will.
Even more conjectural is the situation that will prevail twenty years after the husband's death when the second half of the residue is to be paid under certain conditions to the charitable corporation. Who can say that the Girl Scouts will then be in possession of the country place? If, in the meantime, the corporation shall have abandoned the property or shall have failed to use it as a means of character building or as a help to the cause, then under the will title will have passed to the Esther Chapter of the Eastern Star for their work; and if the property is in its possession, it will be entitled to a transfer of the entire remaining estate. Obviously the testatrix herself, despite her great interest in the Girl Scout movement, was uncertain what action the controlling officials would take in regard to her bequests, conditioned as they were. We find ourselves in like doubt, and as the Esther Chapter of the Eastern Star is not such a corporation as is described in Section 303 of the Act, we are obliged to hold that the legacies of the residue are not deductible for the purposes of the tax.
We think that these considerations must control the decision of the pending case rather than the nature of the interest in the property, as vested or contingent, derived by the Girl Scouts, Inc., under the will, or the nature of the conditions, precedent or subsequent, upon which the bequests depended. See Helvering v. Hallock, 309 U.S. 106, 60 S.Ct. 444, 84 L.Ed. 604, 125 A.L.R. 1368; 28 Va.Law Rev. 387.
The decision of the Board of Tax Appeals is reversed.
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958 F.2d 362
Banzhoff (Harry G., III)v.May (John A.), Bressi (Nick), Medlar (Mike), Mountain (Rosemary)
NO. 91-5883
United States Court of Appeals,Third Circuit.
Feb 24, 1992
Appeal From: M.D.Pa.,
McClure, J.
1
AFFIRMED.
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67 So.3d 202 (2011)
BAKER
v.
STATE.
No. 1D11-2715.
District Court of Appeal of Florida, First District.
August 11, 2011.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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922 F.2d 848
Raynorv.Davis
NO. 90-8230
United States Court of Appeals,Eleventh Circuit.
DEC 20, 1990
1
Appeal From: M.D.Ga.
2
REVERSED IN PART, VACATED IN PART.
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58 Cal.App.2d 704 (1943)
D. L. SEVERN, as Administrator with the Will Annexed, etc., Respondent,
v.
BEA ANN RUHDE et al., Appellants.
Civ. No. 13975.
California Court of Appeals. Second Dist., Div. Two.
May 21, 1943.
J. E. Simpson for Appellant Ruhde.
James V. Brewer for Appellant Cassey.
W. I. Gilbert, Jr., for Respondent.
WOOD (W. J.), J.
Pheba Ann Cassey died on April 11, 1941, at the age of 87 years, leaving a will dated March 31, 1941, in which she gave all of her property to her four children in equal shares. She had given a deed to a parcel of real estate to her daughter, Bea Ann Ruhde. This deed bore the date of August 12, 1938, and was acknowledged on February 15, 1939. She gave a joint tenancy deed dated March 18, 1941, covering the same property to her son, George Vernon Cassey, in which he was named as joint tenant with herself. This deed was recorded on the day of its date. In this action the administrator with the will annexed of the estate of Pheba Ann Cassey seeks to quiet title to the real estate described in these two deeds and to require reconveyances by the grantees named in the deeds. The trial court having rendered judgment in favor of plaintiff, separate appeals are prosecuted by Bea Ann Ruhde and George Vernon Cassey.
In the first count of the complaint plaintiff sets forth the usual allegations of an action to quiet title. In the second count plaintiff alleges that when decedent signed the conveyance in favor of defendant Ruhde she instructed said defendant not to record the instrument until after her death and further "instructed" her that "she would continue to exercise management and control over said property and collect the rents therefrom." The complaint contains no allegation that the deed was not delivered to defendant Ruhde. In several other counts plaintiff sets forth various allegations concerning the execution of the joint tenancy deed to defendant Cassey, stating that decedent had instructed said defendant not to record the instrument until after her death, and that the deed to Cassey had been procured fraudulently, without consideration and in violation of his confidential position. The trial court filed findings sustaining the allegations of the complaint as to defendant Cassey. The court also filed findings sustaining the allegations of the complaint as to defendant Ruhde and further found that decedent did not deliver or *706 intend to deliver the instrument of conveyance to defendant Ruhde.
[1a] Mrs. Ruhde now contends that the findings as to non-delivery of the deed to her are without support in the evidence. She testified that decedent and the witness had lived together about five years prior to decedent's death; that in March, 1939, decedent had delivered to her a deed to the property in question and that the witness had kept the deed at all times in her possession in a little box with her insurance papers, except for the time the deed was in the office of the county recorder; that at the time of the delivery of the deed decedent told her she wanted the witness to have the property since the boys had had their share; that at the time of the delivery of the deed she gave to decedent the sum of $1; that practically all of the time after the delivery of the deed the witness received from decedent the rents from the property; that decedent "did go out and collect them because she always liked to visit with the tenants"; that decedent was the widow of a Civil War veteran and a Gold Star mother and there was discussion between the witness and decedent concerning the fact that taxes would have to be paid on the property if the deed to the witness should be recorded; that she "thought it was alright as it was"; that on April 26, 1940, decedent executed a mortgage on the property in the sum of $500, the note, but not the mortgage, being signed by the witness; that this sum of $500 was used as part payment for a home in Artesia, where the witness and decedent lived; that the deed was recorded at the suggestion of decedent shortly before her death.
The testimony of defendant Ruhde is supplemented by the testimony of a number of witnesses who stated that decedent had told them before the delivery of the deed that she intended to convey the property to her daughter and by the testimony of other witnesses who stated that decedent had told them that she had conveyed the property to her daughter. The witness R. H. Bailey testified that he boarded and roomed at defendant Ruhde's home and was present at the time of the delivery of the deed to her; that decedent handed the deed to Mrs. Ruhde saying, "Daughter, here is a deed to the property. I want you to have it, because the boys have their own homes and their own jobs and can take care of themselves, and I know if I get sick you will take care of me, and I want you to have the property"; that decedent also *707 said to her daughter, "To make this legal you have to give me some money," whereupon Mrs. Ruhde gave a dollar to decedent.
[2] A presumption of delivery arose from the fact that Mrs. Ruhde, the grantee, actually had the possession of the deed and produced it in court. Although plaintiff could present evidence to rebut the presumption of delivery arising from the possession of the deed, "nothing but the most satisfactory evidence of non-delivery should prevail against the presumption." The evidence should be "clear and convincing." (Stewart v. Silva, 192 Cal. 405, 409, 410 [221 P. 191].) In the Stewart case the grantor executed a conveyance and in the presence of his attorney handed the deed to the grantee instructing the grantee not to record it until after his death and stating that he would continue to receive the interest on the property and pay the taxes. After delivery of the deed the attorney, on behalf of the grantor, prepared in the grantee's name an instrument by which the property was leased to another party. The trial court found that there had been no delivery of the deed but on appeal the judgment was reversed, the reviewing court holding that even if the trial court disbelieved the testimony of the attorney and the other witnesses who testified on behalf of the grantee with respect to the delivery of the deed, there was no evidence to overcome the presumption of delivery derived from the fact that the grantee had possession of the deed; and that the fact that the grantor at the time of the delivery expressed a desire that the deed should not be recorded until after his death and intended to exercise acts of ownership thereon during his lifetime did not prevent the delivery from being effective if the grantor did in fact intend to deliver the deed. (See, also, Longley v. Brooks, 13 Cal.2d 754 [92 P.2d 394].)
[1b] We find no evidence in the present case which destroys the positive testimony of defendant Ruhde and that of her witnesses concerning the delivery of the deed. The record is devoid of evidence that decedent instructed Mrs. Ruhde not to record the deed. Plaintiff points to the fact that the deed was kept by defendant Ruhde with papers belonging to her mother at her home but we fail to see how this circumstance is incompatible with Mrs. Ruhde's claim that the deed was delivered to her and was in her possession. A satisfactory explanation is given for the failure of Mrs. Ruhde to record the deed promptly. She also gave a reasonable *708 explanation of decedent's actions in collecting the rents which, it is to be recalled, were turned over to Mrs. Ruhde. Since the property was left in decedent's name to avoid payment of taxes a reasonable explanation is presented for the execution of the mortgage by decedent to raise the sum of $500 for a home for the mother and the daughter. The evidence upon which the trial court attempted to draw an inference of non-delivery of the deed is far from clear and convincing. These circumstances are not sufficiently substantial to justify a finding of non-delivery of the deed when confronted with the presumption arising from the possession of the deed by Mrs. Ruhde and the positive evidence presented by her that the deed was in fact delivered.
[3] Evidence was received by the court from defendant Cassey and witnesses in his behalf to establish that decedent went to the office of a lawyer and executed the joint tenancy deed and in so doing made various statements which indicated that she then claimed to be the owner of the property in question. This testimony related to declarations and transactions which occurred long after the execution and delivery of the deed to defendant Ruhde. The testimony may have been admissible in connection with the issues involved in the allegations concerning the joint tenancy deed but they were inadmissible to defeat the title of defendant Ruhde. Declarations of a grantor after he has parted with his title tending to show retention of title are not admissible against those claiming under him. (Ord v. Ord, 99 Cal. 523 [34 P. 83]; Ross v. Wellman, 102 Cal. 1 [36 P. 402].)
Since decedent conveyed all of her interest in the property to Mrs. Ruhde, it is apparent that nothing was conveyed by the alleged delivery of the joint tenancy deed to defendant Cassey at a later date. Defendant Cassey was not a purchaser for a valuable consideration and the prior grant to his sister is conclusive as to him. (Civ. Code, sec. 1107.) It is therefore unnecessary to discuss herein his contention that the findings as to him are not supported by the evidence.
The judgment is reversed.
Moore, P. J., and McComb, J., concurred.
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USCA1 Opinion
UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT _________________________ No. 93-2041 UNITED STATES OF AMERICA, Appellant, v. RICHARD A. HORN, ET AL., Defendants, Appellees. _________________________ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE [Hon. Joseph A. DiClerico, Jr., U.S. District Judge] ___________________ _________________________ Before Selya, Circuit Judge, _____________ Bownes, Senior Circuit Judge, ____________________ and Boudin, Circuit Judge. _____________ _________________________ Ellen R. Meltzer, Special Counsel, Fraud Section, U.S. Dep't ________________ of Justice, with whom Peter E. Papps, United States Attorney, and ______________ Alexander Weir III, Trial Attorney, U.S. Dep't of Justice, were on brief, for the United States. Christopher R. Goddu and Peter G. Callaghan, with whom James ____________________ __________________ _____ M. Costello, Robert E. McDaniel, Devine, Millimet & Branch P.A., ___________ ___________________ ______________________________ Steven M. Gordon, Shaheen, Cappiello, Stein & Gordon, William E. ________________ ___________________________________ __________ Brennan, Timothy I. Robinson, and Brennan, Caron, Lenehan & _______ ____________________ ___________________________ Iacopino were on consolidated brief, for appellees. ________ _________________________ July 25, 1994 _________________________ SELYA, Circuit Judge. We decide today a question of SELYA, Circuit Judge. _____________ first impression: Do principles of sovereign immunity bar a federal district court, exercising its supervisory power, from assessing attorneys' fees and costs against the federal government in a criminal case? We answer this question affirmatively and, therefore, annul the district court's fee- shifting orders. I. FACTUAL BACKGROUND I. FACTUAL BACKGROUND This appeal arises out of unpardonable misconduct committed by a federal prosecutor who should have known better. The factual background of the criminal case in which the misconduct occurred a multi-defendant prosecution for, inter _____ alia, conspiracy to defraud a federally insured financial ____ institution is memorialized in a recent opinion of this court. See United States v. Lacroix, ___ F.3d ___, ___ (1st Cir. 1994) ___ _____________ _______ [No. 93-1845, slip op. at 2-4]. The facts pertaining to the misconduct are recounted in the opinion below. See United States ___ _____________ v. Horn, 811 F. Supp. 739, 741-44, 748-51 (D.N.H. 1992). For ____ purposes of deciding the abstract question of law that confronts us today, we largely omit the former set of facts, and limn the latter in less than exegetic detail. In mid-1992, a federal grand jury returned a 102-count indictment against seven individuals allegedly involved in a conspiracy to market and sell newly constructed homes by fraudulent means. The indictment charged violations of 18 U.S.C. 2371, 1014 and 1344. The prosecutors who controlled the case 2 were members of the Justice Department's "New England Bank Fraud Task Force," so called. The defendants, none of whom were indigent, obtained counsel at their own expense. During pretrial proceedings, the government made more than 10,000 documents available for inspection at the Boston office of Aspen Systems, an independent document management firm retained by the Task Force. On November 9, 1992, an attorney representing defendants Matthew Zsofka, John Lee, and Evangelist Lacroix visited the document repository to search for papers that might prove helpful in cross-examination. A government paralegal volunteered to have a member of Aspen's clerical staff photocopy any document that caught the lawyer's eye. The attorney accepted the offer. When the paralegal mentioned this undertaking to the lead prosecutor, she was instructed to have the Aspen employee make an extra copy of each defense-selected document for the government's edification. Defense counsel was not informed of this added flourish. To paraphrase the Scottish poet, the best-laid schemes of mice and prosecutors often go awry. Cf. Robert Burns, To a ___ ____ Mouse (1785). When the photocopying of desired documents took _____ longer than seemed reasonable, the defense attorney smelled a rat. A cursory investigation uncovered the prosecution's experiment in duplicitous duplication. The lawyer promptly demanded that the government return its copies of the papers culled by the defense. When his demand fell on deaf ears, he immediately drafted a motion to seal, filed the motion with the 3 district court, and servedit before theclose of business thatday. At this delicate juncture, the lead prosecutor poured kerosene on a raging fire.1 She did not passively await the court's ruling on the motion, but, instead, during the three days that elapsed before the district court took up the motion, the prosecutor reviewed the surreptitiously duplicated documents, discussed them with two of her subalterns, and used them to prepare a key prosecution witness (in the presence of a second possible witness). Thus, by November 13, 1992, when the court granted the motion to seal and explicitly instructed the lead prosecutor not to make further use of the papers singled out by the defense or take further advantage of the situation, appreciable damage already had been done. The lead prosecutor then made a bad situation worse. Two pages mysteriously disappeared from the lead prosecutor's cache of ill-gotten documents before the set was submitted to the district court for sealing. And in direct defiance of the court's order, the lead prosecutor prepared a complete new set for her own use. Adding insult to injury, she next signed an affidavit of somewhat questionable veracity. Finally, when she appeared before the district court to discuss the bizarre game ____________________ 1The district court made a deliberate decision to spare the lead prosecutor public humiliation and revised its order before publication to delete any mention of the prosecutor's name. Although we, if writing on a pristine page, might not be so solicitous, we honor the district court's exercise of its discretion, mindful that its choice has substantive implications. Cf. United States v. Hasting, 461 U.S. 499, 506 n.5 (1983) ___ _____________ _______ (listing public chastisement of errant attorney as a permissible form of sanction for misconduct). 4 she had been playing, she made a series of inconsistent statements evincing what the court charitably called a "lack of candor." Horn, 811 F. Supp. at 749, 750 n.4. ____ From the outset, defendants Zsofka, Lee, and Lacroix had mounted a cooperative defense. Thus, the three of them were equally vulnerable to the misconduct that occurred. Not surprisingly, the trio moved to dismiss the case on the ground of prosecutorial misconduct.2 The government objected. In evaluating the motions, the lower court ruled that the current selection during the discovery phase of a pending case offers insight into counsel's thoughts, and, therefore, constitutes privileged work product. See id. at 745-47 (citing In re San ___ ___ __________ Juan Dupont Plaza Hotel Fire Litig., 859 F.2d 1007 (1st Cir. ______________________________________ 1988)). After rejecting the government's argument that the privilege had been waived, the court determined that the lead prosecutor, by furtively copying and thereafter reviewing the selected documents, crossed the ethical line. The court further ruled that this prosecutorial misconduct not only violated the defendants' work-product privilege, but also abridged their Fifth Amendment right to due process and their Sixth Amendment right to ____________________ 2For ease in reference, we call Zsofka, Lee, and Lacroix "the appellees." Withal, we note that the district court permitted three other defendants Richard Horn, Patrick Dion, and Patricia Dion to join in the request for dismissal. See ___ Horn, 811 F. Supp. at 744-45. Though they had no connection to ____ the duped attorney, these three defendants ultimately received modest fee awards. Notwithstanding, their monetary interest in this appeal, they eschewed the filing of appellate briefs. Consequently, we make no further reference to them or to a seventh defendant, Susan Yildiz, who entered into a plea agreement before the misconduct occurred. 5 effective assistance of counsel. See id. at 747-52. ___ ___ Finding prejudice, but not a stain so indelible as to justify dismissing the indictment, see id. at 751, the court ___ ___ stitched together a serviceable fabric of narrowly tailored remedies, see id. at 751-52. The court ordered the government to ___ ___ provide the defense with summaries of its witnesses' testimony and lists of its exhibits; permit the defense to depose the two potential witnesses who had been exposed to the bootleg documents; refrain from referring at trial to the substance of the documents except in response to defense references; and remove the lead prosecutor from the case. See id. at 752. ___ ___ Additionally, the court referred the lead prosecutor to the disciplinary committees of her two bar associations, and, in the portion of its order that sparked the current controversy, the court directed the government to pay the fees and costs incurred by the defendants in litigating the misconduct issue. See id. ___ ___ Although the court's original order was inexplicit concerning the source of its authority to assess fees and costs, the court, in denying the government's motion to reconsider, explained that it grounded this sanction in the judiciary's supervisory power. See ___ id. at 753-54. ___ Zsofka, Lee, and Lacroix stood trial early in 1993. They were each convicted on at least one count, and were sentenced in July.3 On August 18, 1993, the district court ____________________ 3The other four defendants pled guilty at various times. They were all sentenced in May of 1993. 6 quantified its earlier order, assessing a grand total of $46,477.80 in fees and costs. The other sanctions have been carried out and the defense no longer presses the claim that the district court should have dismissed the indictment. Hence, all that remains of the case is the government's appeal from the assessment of fees. The government contests the award chiefly on the ground that it is prohibited by principles of sovereign immunity.4 Extracted from its complicated factual predicate, drained of rancor, and separated from other, essentially extraneous disputes, this appeal requires us to serve as the dispatcher at a crossing where two powerful engines the judiciary's supervisory power and the government's sovereign immunity are on a collision course. II. DOCTRINAL BACKGROUND II. DOCTRINAL BACKGROUND In ascertaining what happens when doctrines clash, derivation frequently becomes important. Thus, we turn to this task. A. Supervisory Power. A. Supervisory Power. _________________ Supervisory power, sometimes known as inherent power, encompasses those powers which, though "not specifically required by the Constitution or the Congress," United States v. Hasting, _____________ _______ ____________________ 4The government also maintains that it could not have violated any applicable work-product privilege, and cannot be penalized for so doing, because the defense waived any such privilege by making voluntary disclosures to a government agent, namely, the Aspen office worker. Because we agree that the government is shielded from the monetary award by principles of sovereign immunity, we take no view of this asseveration. 7 461 U.S. 499, 505 (1983), are nonetheless "necessary to the exercise of all others," Roadway Express, Inc. v. Piper, 447 U.S. _____________________ _____ 752, 764 (1980) (quoting United States v. Hudson, 11 U.S. (7 ______________ ______ Cranch) 32, 34 (1812)). See generally United States v. Santana, ___ _________ _____________ _______ 6 F.3d 1, 9-10 (1st Cir. 1993). Although the doctrine's ancestry can be traced to the early days of the Republic, see, e.g., Hudson, 11 U.S. at 34; see ___ ____ ______ ___ also Ex parte Robinson, 86 U.S. (19 Wall.) 505, 510 (1873) ____ __ _____ ________ (observing that the "moment the courts of the United States were called into existence . . . they became possessed of [inherent] power"), a full-scale genealogical dig would serve no useful purpose. It suffices to say that the doctrine emerged in modern form roughly a half-century ago, see McNabb v. United States, 318 ___ ______ _____________ U.S. 332, 341 (1943), and it has since developed most robustly in the area of criminal procedure, see Sara Sun Beale, Reconsidering ___ _____________ Supervisory Power in Criminal Cases, 84 Colum. L. Rev. 1433, ______________________________________ 1435-64 (1984). While supervisory power is sometimes understood to derive from the Constitution, either as incidental to the Article III grant of judicial power, see id. at 1464-83, or as ___ ___ implicit in the separation of powers, see Eash v. Riggins ___ ____ _______ Trucking, Inc., 757 F.2d 557, 562 (3d Cir. 1985), the Court has ______________ made it clear that, at least as a general proposition, Congress may limit the power of lower federal courts by rule or statute, see Chambers v. NASCO, Inc., 501 U.S. 32, 47 (1991).5 ____________ ___________ ____________________ 5It is not yet settled whether some residuum of the courts' supervisory power is so integral to the judicial function that it may not be regulated by Congress (or, alternatively, may only be 8 In what is not necessarily an exhaustive listing, the Court has recognized three purposes to which the supervisory power may be dedicated: "to implement a remedy for violation of recognized rights, to preserve judicial integrity . . . and . . . as a remedy designed to deter illegal conduct." Hasting, 461 _______ U.S. at 505 (internal citations omitted). Invoking this third theme, we have warned that we will consider unleashing the supervisory power in criminal cases "[w]hen confronted with extreme misconduct and prejudice," in order "to secure enforcement of `better prosecutorial practice and reprimand of those who fail to observe it.'" United States v. Osorio, 929 ______________ ______ F.2d 753, 763 (1st Cir. 1991) (quoting United States v. Pacheco- _____________ ________ Ortiz, 889 F.2d 301, 310-11 (1st Cir. 1989)). _____ The supervisory power has definite limits. See ___ Hasting, 461 U.S. at 505. For one thing, the supervisory power _______ doctrine is interstitial in the sense that it applies only when there is no effective alternative provided by rule, statute, or constitutional clause. See Chambers, 501 U.S. at 50-51. For ___ ________ another thing, even when inherent powers legitimately can be invoked, they must be exercised with restraint and circumspection, both "because [they] are shielded from direct ____________________ regulated up to a certain point). In this connection, we note that, although some courts of appeals have attempted to subdivide the supervisory power into three categories ranged along a continuum according to their degree of necessity, and, concomitantly, the extent to which they may be subject to congressional limitation, see In re Stone, 986 F.2d 898, 901-03 ___ ____________ (5th Cir. 1993); Eash, 757 F.2d at 562-63, the Supreme Court has ____ expressly declined to adopt this taxonomy, see Chambers, 501 U.S. ___ ________ at 48 n.12. 9 democratic controls," Roadway Express, 447 U.S. at 764, and _______________ "[b]ecause of their very potency," Chambers, 501 U.S. at 44. ________ In particular, it is inappropriate for courts to attempt to use the supervisory power to justify an extreme remedy when, short of such heroic measures, the means are at hand to construct a satisfactory anodyne more narrowly tailored to the objective. See Hasting, 461 U.S. at 506 (overturning use of ___ _______ supervisory power to deter prosecutorial misconduct through reversal of conviction). It is equally inappropriate for a court to gear up the supervisory power in an effort to circumvent a limitation firmly established under conventional doctrine. See ___ Bank of Nova Scotia v. United States, 487 U.S. 250, 254-55 (1988) ___________________ _____________ (overturning use of supervisory power to evade the harmless error inquiry; United States v. Payner, 447 U.S. 727, 735-36 (1980) _____________ ______ (overturning use of supervisory power to craft a new exclusionary rule designed to reach situations in which the constitutional exclusionary rule is not triggered). Illustrating the same point, this court has ruled it inappropriate to use the supervisory power to redress misconduct that did not result in harm, see Santana, 6 F.3d at 11 (citing cases), or that resulted ___ _______ in harm to someone other than the complaining defendants, see id. ___ ___ It has been squarely held that a court's array of supervisory powers includes the power to assess attorneys' fees against either parties or their attorneys in befitting situations. See Roadway Express, 447 U.S. at 764-67; In re ___ ________________ _____ Cordova Gonzalez, 726 F.2d 16, 20 (1st Cir. 1984). The Court ________________ 10 recently reaffirmed this rule, see Chambers, 501 U.S. at 49, and ___ ________ clarified its contours. While a court may invoke its supervisory power to assess fees only when the fees are intended as a sanction responding to a display of bad faith, the bad faith may occur in connection with "a full range of litigation abuses." Id. at 46. Moreover, even though a particular abuse is covered ___ by a specific statute or rule, a court still may invoke its supervisory power to address the abuse if the existing remedial provision is inadequate to the task. Id. at 50-51. ___ B. Sovereign Immunity. B. Sovereign Immunity. __________________ The principle of sovereign immunity, in its primary form, dictates that the United States may not be sued except with its consent. This tenet was first stated, ipse dixit, by Chief ____ _____ Justice Marshall in Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, ______ ________ 411-12 (1821) (dictum). It has been reaffirmed as recently as this past term. See FDIC v. Meyer, 114 S. Ct. 996, 1000 (1994); ___ ____ _____ see also Gonsalves v. IRS, 975 F.2d 13, 16 (1st Cir. 1992) (per ___ ____ _________ ___ curiam). The secondary principle that monetary penalties cannot be collected from the federal government absent its consent was first articulated, in the narrow context of an assessment for costs, in United States v. Hooe, 7 U.S. (3 Cranch) 73, 90-91 ______________ ____ (1805). However, the Hooe Court made no explicit reference to ____ sovereign immunity, and it was not until four decades later that the two principles formally converged, see United States v. ___ _____________ McLemore, 45 U.S. (4 How.) 286, 287-88 (1846). They have been ________ 11 taken in tandem ever since in cases involving costs. See, e.g., ___ ____ United States v. Bodcaw, 440 U.S. 202, 203-04 n.3 (1979) (per _____________ ______ curiam); Fairmont Creamery Co. v. Minnesota, 275 U.S. 70, 73-74 _____________________ _________ (1927); United States v. Chemical Found., Inc., 272 U.S. 1, 20 _____________ ______________________ (1926); Shewan v. United States, 267 U.S. 86, 87 (1925). ______ _____________ The Supreme Court recently removed any vestige of doubt that may have lingered as to whether these cases envisioned sovereign immunity as a bar not only to costs but also to attorneys' fees.6 See Ruckelshaus v. Sierra Club, 463 U.S. 680, ___ ___________ ___________ 685 (1983) (holding that, waiver aside, sovereign immunity bars the shifting of attorneys' fees against the federal government) (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. __________________________ ________________ 240, 267-68 & n.42 (1975)). Since then, the proposition that sovereign immunity bars the recovery of attorneys' fees has become ensconced at the circuit level. See, e.g., In re Turner, ___ ____ ____________ 14 F.3d 637, 640 (D.C. Cir. 1994) (per curiam); In re Perry, 882 ____________ F.2d 534, 543-44 (1st Cir. 1989); Campbell v. United States, 835 ________ _____________ F.2d 193, 195 (9th Cir. 1987); Ewing & Thomas, P.A. v. Heye, 803 ____________________ ____ F.2d 613, 616 (11th Cir. 1986). Civil and administrative penalties against the government are subject to the same prohibition, see, e.g., Department of Energy v. Ohio, 112 S. Ct. ___ ____ ____________________ ____ 1627, 1631 (1992), as is interest on (congressionally permitted) ____________________ 6We think it is unlikely that such doubts were entertained in earnest. After all, Congress would not have felt impelled to enact the many statutes waiving immunity to attorneys' fees, see ___ 1 Mary Frances Derfner & Arthur D. Wolf, Court Awarded Attorneys' ________________________ Fees 5.03[12][b] (1993) (cataloguing statutes), unless it ____ understood that, in the absence of such statutes, attorneys' fees would not be recoverable against the federal sovereign. 12 court awards, see, e.g., Library of Congress v. Shaw, 478 U.S. ___ ____ ____________________ ____ 310, 314 (1986). Viewed against this austere backdrop, we think it is fair to say that, by common understanding, the secondary principle of sovereign immunity operates on the broadest possible level: it stands as an obstacle to virtually all direct assaults against the public fisc, save only those incursions from time to time authorized by Congress. Those who seek a deep understanding of the law's profundities are likely to find sovereign immunity a frustrating topic, for, from the very beginning, sovereign immunity has been "accepted as a point of departure unquestioned," Cunningham v. __________ Macon & Brunswick R.R., 109 U.S. 446, 451 (1883), or, put another ______________________ way, simply taken at face value and "treated as an established doctrine," United States v. Lee, 106 U.S. 196, 207 (1882). ______________ ___ Although we know relatively little, we do know that the doctrine derives from the common law tradition that the king should be insulated from suit absent his consent. See, e.g., Fairmont ___ ____ ________ Creamery, 275 U.S. at 73; see also Chisolm v. Georgia, 2 U.S. (2 ________ ___ ____ _______ _______ Dall.) 419, 435-45 (1793) (Iredell, J., dissenting) (discussing historical origins of doctrine). To be sure, this tradition could not be transplanted root and branch into a system where sovereignty was diffused both vertically (by federalism) and horizontally (by the separation of powers). Accordingly, in regard to the federal government, the law adapted the doctrine in such a way that Congress inherited the king's sovereign role of granting consent to be sued. See Chisolm, 2 U.S. at 436 ___ _______ 13 (Iredell, J., dissenting). One consequence of this adaptation is that executive officers lack the power to waive the federal government's sovereign immunity. See United States v. Shaw, 309 ___ _____________ ____ U.S. 495, 501 (1940); Munro v. United States, 303 U.S. 36, 41 _____ _____________ (1938); Chemical Found., 272 U.S. at 20-21. _______________ Courts have mentioned two rationales for retaining the adapted doctrine in a democratic society. Some judges have theorized that it is necessary to protect the operations of government from undue interference and financial embarrassment. See, e.g., Larson v. Domestic & Foreign Commerce Corp., 337 U.S. ___ ____ ______ _________________________________ 682, 704 (1949); Lee, 106 U.S. at 226 (Gray, J., dissenting); The ___ ___ Siren, 74 U.S. (7 Wall.) 152, 154 (1868). Other judges, taking a _____ more positivist view of law, have suggested that the right to recover against the government cannot exist unless the government itself deigns to create such a right.7 See, e.g., Kawananakoa ___ ____ ___________ v. Polybank, 205 U.S. 349, 353 (1907). ________ Regardless of whether sovereign immunity rests on tradition, reason, or inertia, the doctrine is deeply entrenched in American law. Withal, Congress has liberally exercised its prerogative to abolish particular manifestations of the doctrine. ____________________ 7For its part, the scholarly community has been overwhelmingly hostile to the doctrine, often denouncing it as mischievous formalism, see Kenneth Culp Davis, Suing the ___ __________ Government by Falsely Pretending to Sue an Officer, 29 U. Chi. L. __________________________________________________ Rev. 435, 436-38 (1962), with little basis in English history, see Louis L. Jaffe, Suits Against Government and Officers: ___ _________________________________________ Sovereign Immunity, 77 Harv. L. Rev. 1, 2-19 (1963), and ___________________ antithetical to the democratic spirit, see John E. H. Sherry, The ___ ___ Myth that the King Can Do No Wrong, 22 Admin. L. Rev. 39, 56-57 ___________________________________ (1969). 14 See, e.g., 28 U.S.C. 1346(b), 2671-2678, 2680 (Federal Torts ___ ____ Claims Act) (subjecting the government to suit for various torts); 28 U.S.C. 1346(a), 1491 (Tucker Act) (subjecting the government to suit for damages in, inter alia, contract cases); _____ ____ see also Derfner & Wolf, supra note 6 (listing statutes waiving ___ ____ _____ governmental immunity to claims for counsel fees in various specialized contexts); cf. 18 U.S.C. 3006A (Criminal Justice ___ Act) (requiring government to pay counsel fees and other expenses on behalf of indigent criminal defendants). In considering legislation that is claimed to have the effect of waiving sovereign immunity in a particular class of cases, courts usually have been guided by two maxims. First, a waiver of sovereign immunity must be definitely and unequivocally expressed. See United States v. Mitchell, 445 U.S. 535, 538 ___ _____________ ________ (1980); In re Perry, 882 F.2d at 544. The Court has gone so far ___________ as to suggest that the unequivocal expression must appear in the text of the statute itself. See United States v. Nordic Village, ___ _____________ _______________ Inc., 112 S. Ct. 1011, 1016 (1992); Ardestani v. INS, 112 S. Ct. ____ _________ ___ 515, 520 (1991). Second, a waiver of sovereign immunity always is to be construed strictly in favor of the federal government, and must not be enlarged beyond such boundaries as its language plainly requires. See Nordic Village, 112 S. Ct. at 1014-15; ___ _______________ Ruckelshaus, 463 U.S. at 685; In re Perry, 882 F.2d at 544. ___________ ___________ Applying these tests, several courts have held that monetary sanctions for litigation abuse are not barred by sovereign immunity in certain classes of cases on the theory that 15 an enacted statute, typically the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412 (allowing prevailing parties to recover fees from the government in certain civil and administrative proceedings), serves to waive the government's immunity. See, ___ e.g., M. A. Mortensen Co. v. United States, 996 F.2d 1177, 1181- ____ ____________________ _____________ 82 (Fed. Cir. 1993) (holding that the EAJA works a waiver of immunity sufficient to allow the imposition of fees under Fed. R. Civ. P. 37); In re Good Hope Indus., Inc., 886 F.2d 480, 482 (1st ____________________________ Cir. 1989) (same, in respect to fees under 28 U.S.C. 1912 and Fed. R. App. P. 38); Adamson v. Bowen, 855 F.2d 668, 672 (10th _______ _____ Cir. 1988) (same, in respect to monetary sanction under Fed. R. Civ. P. 11); United States v. Gavilan Joint Comm'y Coll. Dist., ______________ _________________________________ 849 F.2d 1246, 1251 (9th Cir. 1988) (similar); see also Schanen ___ ____ _______ v. United States DOJ, 798 F.2d 348, 350 (9th Cir. 1985) (imposing _________________ monetary penalty against government under Fed. R. Civ. P. 60(b) without addressing sovereign immunity); United States v. National _____________ ________ Medical Enters., Inc., 792 F.2d 906, 910-11 (9th Cir. 1986) ______________________ (upholding penalty against government imposed under Fed. R. Civ. P. 37(b) without addressing sovereign immunity). Two panels in the Ninth Circuit have suggested that the Civil Rules themselves, having been authorized by Congress, may provide the basis for a waiver of sovereign immunity. See Mattingly v. United States, ___ _________ ______________ 939 F.2d 816, 818 (9th Cir. 1991) (discussing Fed. R. Civ. P. 11); Barry v. Bowen, 884 F.2d 442, 444 (9th Cir. 1989) (same).8 _____ _____ ____________________ 8At least one writer has expressed grave reservations about these decisions. See Timothy J. Simeone, Comment, Rule 11 and ___ ___________ Federal Sovereign Immunity: Respecting the Explicit Waiver _________________________________________________________________ 16 At the same time, monetary penalties under court rules have been found to be barred by sovereign immunity in other contexts. See, e.g., United States v. Woodley, 9 F.3d 774, 781- ___ ____ _____________ _______ 82 (9th Cir. 1993) (holding that neither a local rule nor Fed. R. Crim. P. 16(d)(2) works a waiver). And, moreover, even though a federal statute, 18 U.S.C. 401, confers broad powers upon federal district courts to punish contumacious conduct,9 most courts continue to hold that sovereign immunity bars court- imposed fines for contempt against the government. See Coleman ___ _______ v. Espy, 986 F.2d 1184, 1191-92 (8th Cir. 1993) (holding that ____ compensatory contempt sanctions are barred by sovereign immunity); Barry, 884 F.2d at 444 (holding that coercive contempt _____ sanctions are barred by sovereign immunity); see also McBride v. ___ ____ _______ Coleman, 955 F.2d 571, 576-77 (8th Cir. 1992) (dictum; expressing _______ grave doubt that compensatory contempt sanctions can override ____________________ Requirement, 60 U. Chi. L. Rev. 1043, 1052-57 (1993) (criticizing ___________ cases employing the narrow and broad rationale alike as inconsistent with the Court's rigid adherence in recent years to the unequivocal expression requirement). 9The statute provides: A court of the United States shall have power to punish by fine or imprisonment, at its discretion, such contempt of its authority, and none other, as (1) Misbehavior of any person in its presence or so near thereto as to obstruct the administration of justice; (2) Misbehavior of any of its officers in their official transactions; (3) Disobedience or resistance to its lawful writ, process, order, rule, decree, or command. 18 U.S.C. 401. 17 sovereign immunity). But see Armstrong v. Executive Office of ___ ___ _________ ____________________ the Pres., 821 F. Supp. 761, 773 (D.D.C. 1993) (holding, without __________ undertaking any waiver analysis, that a coercive contempt sanction is not barred by sovereign immunity). To our knowledge, no court has considered on the merits the applicability of sovereign immunity to a monetary penalty assessed under the judiciary's supervisory power in a criminal case.10 III. ANALYSIS III. ANALYSIS In this case, the doctrines of sovereign immunity and supervisory power, each formidable in its own right, are in unavoidable tension.11 Despite the fact that, in recent years, ____________________ 10Although the district court in Woodley shifted fees _______ against the government partially in reliance on its supervisory power, the Ninth Circuit overturned the fee award, reasoning on this issue that the availability of other sanctions precluded the court from unleashing its supervisory power. See Woodley, 9 F.3d ___ _______ at 781-82. The ensuing dictum to the effect that sovereign immunity does not bar fee-shifting under the supervisory power, see id. at 782, is both gratuitous and unsupported. ___ ___ Our research has also unearthed an occasional near miss. For example, in Andrulonis v. United States, 724 F. Supp. __________ _____________ 1421, 1537 (N.D.N.Y. 1989), aff'd in part, rev'd in part on other _____________________________________ grounds, 924 F.2d 1210 (2d Cir. 1991), vacated on other grounds, _______ ________________________ 112 S. Ct. 39 (1992), the court granted a motion for sanctions against the federal government made under Rule 11, 28 U.S.C. 1926, and the court's inherent powers, without specifying the source for the sanction imposed. See also United States v. ___ ____ ______________ Prince, 1994 U.S. Dist. LEXIS 2962 at *1-*4 (E.D.N.Y. 1994) ______ (withdrawing assessment of jury costs against U.S. Attorney's Office under court's supervisory power, in the face of a motion for reconsideration arguing constraints imposed by sovereign immunity). 11We see no way to avoid this tension by upholding the fee award on an alternative ground. While government counsel's disobedience and deception of the court perhaps could have been punished under the contempt statute, 18 U.S.C. 401, and the entire fiasco, if conceived as a discovery violation within the 18 the domain of sovereign immunity has tended to contract and the domain of supervisory power has tended to expand, we believe that sovereign immunity ordinarily will trump supervisory power in a head-to-head confrontation. The critical determinant is that the doctrines are of fundamentally different character: supervisory powers are discretionary and carefully circumscribed; sovereign immunity is mandatory and absolute. Consequently, whereas the former may be invoked in the absence of an applicable statute, ___ the latter must be invoked in the absence of an applicable ____ statute; and whereas the former may be tempered by a court to ___ impose certain remedial measures and to withhold others, the latter must be applied mechanically, come what may. In other ____ words, unlike the doctrine of supervisory power, the doctrine of sovereign immunity proceeds by fiat: if Congress has not waived the sovereign's immunity in a given context, the courts are obliged to honor that immunity. See, e.g., Meyer, 114 S. Ct. at ___ ____ _____ ____________________ ambit of Fed. R. Crim. P. 16(b)(2), might have been punishable under the broadly worded sanction authority of Fed. R. Crim. P. 16(d)(2), these possibilities afford no hope of averting a head- on collision between judicial power and sovereign immunity. In the first place, the district court's order made it pellucid that supervisory power comprised the sole foundation on which the monetary sanction rested. See Horn, 811 F. Supp. at 753-54. We ___ ____ will not go behind such a determination and speculate what the court might (or might not) have done had it analyzed the prosecutor's misconduct under a different standard. See R.W. ___ ____ Int'l Corp. v. Welch Foods, Inc., 937 F.2d 11, 19 (1st Cir. ____________ __________________ 1991). In the second place, neither section 401 nor Criminal Rule 16 offer a vehicle powerful enough to overrun sovereign immunity. See Woodley, 9 F.3d at 781-82 (holding that Fed. R. ___ _______ Crim. P. 16 does not work a waiver of sovereign immunity); Espy, ____ 986 F.2d at 1191 (holding that 18 U.S.C. 401 does not work a waiver of sovereign immunity). Thus, dressing the district court's decision in different, less confrontational garb would not sidestep the imminent doctrinal clash. 19 1000. The government tells us that this is precisely such a case: since Congress has not acted, the government's immunity to fee awards in criminal cases remains intact. At first blush, the conclusion seems sound. We are able to discern only three avenues by which appellees arguably might tip-toe around this result. We trace each of these routes. The most obvious detour around the barrier presented by sovereign immunity depends on waiver. If appellees can identify some statute or rule, and show that Congress thereby lifted the federal government's sovereign immunity in this particular context, they would have an unobstructed path. But there is no such statute or rule applicable here and appellees, to their credit, do not pretend that one exists. The second detour embodies the assumption that, in appropriate cases, the judiciary possesses the naked power to override sovereign immunity. We believe that this avenue is a dead end. One of the main purposes of sovereign immunity is to guard against judicial interference in executive functions, see ___ Larson, 337 U.S. at 704, and the notion of a judicial override ______ operating ex proprio vigore would largely frustrate this purpose. __ _______ ______ In any event, the proposed detour runs headlong into a stone wall: Congress, not the courts, is the government's authorized representative for purposes of waiving sovereign immunity. See ___ supra p.13 and cases cited; see also Hans v. Louisiana, 134 U.S. _____ ___ ____ ____ _________ 1, 21 (1890) (declaring that, because the "legislative department 20 of a State represents its polity and its will," "the legislature, and not the courts, is the judge" of when sovereign immunity ought be waived). A third possible route around the barrier is to argue that, for whatever reason, the federal government's sovereign immunity does not extend to monetary sanctions, such as punitive fee awards, levied under a court's supervisory power. It is this avenue that appellees most vigorously explore. Shorn of rhetoric, they assert three basic reasons why the shield of immunity does not cover such situations. We mull each reason in turn. 1. Reward v. Punishment. Appellees assert that, for 1. Reward v. Punishment. ____________________ purposes of sovereign immunity, the law historically has precluded fee-shifting only when it is employed as a reward to prevailing parties and not when it is employed as a punishment for litigation abuse. This foray suggests that what we have called the secondary principle of sovereign immunity the tenet holding that the government is immune to monetary penalties imposed in court cases precludes fee-shifting only when the shifted fees are intended to reward a prevailing party, and not when they are meant to reprimand a misbehaving party. Appellees starts out on solid ground in the sense that the older cases discussing the secondary principle of sovereign immunity all involved monetary awards to prevailing parties directly attributable to litigatory success. See, e.g., Fairmont ___ ____ ________ Creamery, 275 U.S. at 73-74; McLemore, 45 U.S. at 288. But those ________ ________ 21 cases were cases involving costs (or fees taxable as costs) and costs always have been awarded to prevailing parties, at least in the court's discretion.12 Because costs are invariably taxed pursuant to a statute (or a rule having statutory force) that provides for the award, the fact that they are routinely awarded against the government in civil cases (under 28 U.S.C. 2412) is of no assistance to the appellees in this case. Once we move beyond the realm of costs to attorneys' fees, appellees' argument makes very little sense. Apart from a statute or rule so providing, counsel fees cannot be shifted as a reward to a prevailing party in any case, civil or criminal, whether or not the government is the fee target. See Alyeska ___ _______ Pipeline, 421 U.S. at 247 (limning "American rule"). Taking into ________ account the ground rules of American litigation, appellees' argument must mean that sovereign immunity bars fee awards against the government only when the fees are assessed under a ____________________ 12At early common law, costs were awarded to prevailing parties as a matter of course in all cases. See Arthur L. ___ Goodhart, Costs, 38 Yale L.J. 849, 851-53 (1929). Before the _____ adoption of the Civil Rules, costs were generally awarded to prevailing parties as a matter of right in actions at law, and at the judge's discretion on the equity side. See Ex parte ___ _________ Peterson, 253 U.S. 300, 317-18 (1920). In modern practice, costs ________ are commonly taxed against non-prevailing parties in civil cases, see Crawford Fitting Co. v. J. T. Gibbons, Inc., 482 U.S. 437, ___ _____________________ ____________________ 441 (1987); In re Two Appeals Arising out of the San Juan Dupont _____________________________________________________ Plaza Hotel Fire Litig., 994 F.2d 956, 962-64 (1st Cir. 1993); ________________________ see also Fed. R. Civ. P. 54(d), although the judge retains some ___ ____ discretion, see In re Two Appeals, 994 F.2d at 962. ___ ______________________ Theoretically, costs are similarly taxable against convicted defendants in criminal cases, see 28 U.S.C. 1918(b), although ___ the actuality is seldom seen. The statute listing categories of costs generally available, 28 U.S.C. 1920, applies to both civil and criminal cases. See United States v. Procario, 361 ___ _____________ ________ F.2d 683, 684 (2d Cir. 1966) (per curiam). 22 fee-shifting statute or rule. But the case law is arrayed against appellees' position, for the courts have never structured the secondary principle of sovereign immunity in such an odd configuration. Cf., e.g., id. at 267-68 (stating without ___ ____ ___ qualification that fee awards against the government, "if allowable at all, must be expressly provided for by statute"). What is more, a number of courts, ruling on comparable bad-faith sanctions, have either held that sovereign immunity applies, see ___ supra pp. 16-17, or taken for granted that sovereign immunity _____ would apply absent a waiver, see supra pp. 15-16.13 ___ _____ The straw that snaps the camel's back is that the appellees have offered no plausible explanation why the shield of immunity should leave the government exposed to fee awards designed as sanctions for litigation abuse, but simultaneously protect it from fees or other monetary awards routinely given to prevailing parties as virtual bonuses to reward litigatory success. The simple, unarguable fact is that any and all such fee awards would deplete the public coffers, and, consequently, ____________________ 13In this regard, fines for civil contempt under 18 U.S.C. 401, quoted supra note 9, are of special interest because _____ contempt originated as an aspect of the supervisory power, see ___ Shillitani v. United States, 384 U.S. 364, 370 (1966), and it __________ ______________ continues to serve essentially "the same purpose" as do sanctions imposed under the supervisory power in respect to litigants' and lawyers' bad-faith tactics, Chambers, 501 U.S. at 53 (citation ________ omitted). The better reasoned decisions hold that, when the two doctrines lock horns, contempt is barred by sovereign immunity. See supra p. 17. Although these decisions have little bearing ___ _____ here because they turn, explicitly or implicitly, on statutory interpretation, they do show that the principle of immunity to monetary damages is understood by thoughtful courts to sweep broadly. 23 they all must stand on the same footing vis-a-vis principles of sovereign immunity. It follows inexorably that, absent a statute or rule effectuating a waiver, the secondary principle of sovereign immunity bars fee-shifting awards against the government, whatever their intended purpose. 2. The Eleventh Amendment Analogy. It is "settled 2. The Eleventh Amendment Analogy. ________________________________ that an award of attorney's fees ancillary to prospective relief is not subject to the strictures of the Eleventh Amendment." Missouri v. Jenkins, 491 U.S. 274, 279 (1989); see also Fortin v. ________ _______ ___ ____ ______ Commissioner, 692 F.2d 790, 797-98 (1st Cir. 1982) (holding, on ____________ same theory, that avoidable fines for contempt against the State are not barred by the Eleventh Amendment). Appellees urge us to extend this exception to the law of federal sovereign immunity. Although this idea is not original, see McBride, 955 F.2d at 582 ___ _______ (Lay, C.J., concurring and dissenting) (making similar suggestion), embracing it would entail a leap of faith that we are unwilling to take. The Eleventh Amendment focuses exclusively on an immunity shared by the several States. See U.S. Const. amend. ___ 11; see also Hans, 134 U.S. at 10-11 (explicating text of ___ ____ ____ Eleventh Amendment). Freely transposing Eleventh Amendment exceptions to the precincts patrolled by principles of federal sovereign immunity would create a dysfunctional jurisprudential motley and, moreover, would constitute an impermissible deviation from a course previously charted by the Court. Jenkins, the very _______ case bruited by appellees, definitively rejects the argument they 24 advance. There, the Court explained that, had the controversy "dealt with the sovereign immunity of the Federal Government," then in such event there would have been "no prospective- retrospective distinction as there is when . . . it is the Eleventh Amendment immunity of a State that is at issue." Jenkins, 491 U.S. at 282 n.4; see also In re Shafer, 146 B.R. _______ ___ ____ ____________ 477, 480 n.6 (D. Kan. 1992) (echoing Jenkins footnote). _______ 3. Separation of Powers. Appellees' final contention 3. Separation of Powers. _____________________ is that stripping away the power to assess monetary penalties in criminal cases would leave courts defenseless against litigation abuses committed by the government which is, after all, a party to every criminal case in the federal system and thereby would offend the separation of powers. See McBride, 955 F.2d at 582 ___ _______ (Lay, C.J., concurring and dissenting) (developing similar thesis); cf. Chilcutt v. United States, 4 F.3d 1313, 1327 (5th ___ ________ ______________ Cir. 1993) (making comparable suggestion in significantly different context; upholding monetary sanction levied against federal prosecutor personally). This contention seriously overstates the case, and, in all events, asks us to do Congress's work. The fact that sovereign immunity forecloses the imposition of monetary sanctions against the federal government in criminal cases does not leave federal courts at the mercy of cantankerous prosecutors. Courts have many other weapons in their armamentarium. This case aptly illustrates the point. The district judge ordered, among other things, the removal and 25 quarantine of the lead prosecutor, the suppression of tainted documents, and the advance disclosure of the government's trial strategy. In addition, the judge could have ordered the lead prosecutor to pay the accumulated fees, see Chilcutt, 4 F.3d at ___ ________ 1319 (upholding order that government counsel pay, inter alia, _____ ____ for time spent by defense counsel at contempt hearing, without being reimbursed); United States v. Sumitomo Marine & Fire Ins. _____________ ____________________________ Co., 617 F.2d 1365, 1370-71 (9th Cir. 1980) (upholding imposition ___ of monetary sanction for discovery abuse against government attorney as the "only available target for such sanctions"), but did not see fit to do so.14 He also could have ordered the prosecutor to attend ethics seminars at her own expense, see ___ Chilcutt, 4 F.3d at 1319, dispatched her to the Justice ________ Department's internal disciplinary office, see Hasting, 461 U.S. ___ _______ at 506 n.5, or publicly reprimanded the Justice Department itself, see United States v. Prince, 1994 U.S. Dist. LEXIS 2962 ___ _____________ ______ at *1-*4 (E.D.N.Y. 1994).15 While this list is not exhaustive, we are confident that it shows beyond serious question that the court had ample means at its disposal, even without fee-shifting, ____________________ 14There would seem to be no sovereign immunity bar to imposing a monetary penalty as a sanction against a rogue attorney merely because she happens to represent the federal government. See Larson, 337 U.S. at 693 (noting that sovereign ___ ______ immunity does not protect federal officials in the performance of acts that are unconstitutional or beyond their statutory authority); see also Chilcutt, 4 F.3d at 1327; Sumitomo Marine, ___ ____ ________ ________________ 617 F.2d at 1370-71. 15Although the district court eschewed these additional remedies, the Justice Department later engaged its internal disciplinary mechanism on its own initiative. 26 to catch the Justice Department's attention, punish the culprit, and deter future prosecutorial excesses. Of course, there is a more broadly focused reason why the separation-of-powers argument will not wash. While sovereign immunity may marginally limit the courts' ability to function, there is nothing sacrosanct about the courts' power to impose sanctions. Congress has wide-ranging authority to limit supervisory powers generally. See Chambers, 501 U.S. at 47. ___ ________ This includes the authority to place restrictions on courts' inherent power to shift fees. See Alyeska, 421 U.S. at 259 ___ _______ (recognizing "inherent power in the courts to allow attorneys' fees in particular situations, unless forbidden by Congress"). It also includes the authority to regulate the courts' inherent power in respect to contempt. See 18 U.S.C. 401, quoted supra ___ _____ note 9. Circumscription of the fee-shifting power by the application of an ancient (but still viable) common law doctrine, subject to waiver through congressional action, comprises no greater insult to the independence of the Judicial Branch. Our last response to appellees' separation-of-powers argument is to note its indeterminacy. The same argument could be, and has been, turned 180 degrees. At least one highly respected scholar maintains that sovereign immunity "furthers the ________ separation of powers by limiting judicial oversight of executive conduct . . . [and thus] avoid[ing] situations where the courts will impose orders on the other branches of government that might be disregarded." Erwin Chemirinsky, Federal Jurisdiction _____________________ 27 9.2.1, at 545-46 (2d ed. 1994) (emphasis supplied). We will not paint the lily. Neither policy nor precedent supports the proposition that the separation of powers requires taking the quantum leap essayed by the court below. Leaving monetary imposts to one side, the range and reach of other sanctions, remedial and punitive, that are available to federal criminal courts permit those courts to administer their dockets and conduct judicial business with a sufficiently free hand. Courts, like litigants, must abide by certain rules and to the extent that sovereign immunity curbs judicial power, the restraint is tolerable in the constitutional sense. In the last analysis, then, appellees' contention that criminal courts are left impotent if they are deprived of the power to shift fees as a sanction against the government is as empty as a mendicant's purse. To summarize, none of the various possible detours manage to bypass the barrier of sovereign immunity. We hold, therefore, that fee-shifting against the government can be accomplished only in conjunction with the passage of a statute (or a sufficiently explicit rule having the force of a statute) that authorizes such an award. In the absence of such an enactment, the secondary principle of sovereign immunity saves the federal government harmless from all court-imposed monetary assessments, regardless of their timing and purpose. IV. APPELLATE JURISDICTION IV. APPELLATE JURISDICTION We have one more bridge to cross. It is hornbook law 28 that a court cannot act in the absence of subject matter jurisdiction; and that, when such jurisdiction is lacking, a court is obliged to note the defect on its own initiative. See ___ United States v. Pierro, ___ F.3d ___, ___ (1st Cir. 1994) [No. _____________ ______ 93-1313, slip op. at 13-14]; In re Recticel Foam Corp., 859 F.2d __________________________ 1000, 1002 (1st Cir. 1988); see also American Policyholders Ins. ___ ____ ___________________________ Co. v. Nyacol Prods., Inc., 989 F.2d 1256, 1258 (1st Cir. 1993). ___ ___________________ Thus, even though the appellees have not questioned the existence of appellate jurisdiction, we must pursue the point. Parties cannot confer subject matter jurisdiction on either a trial or an appellate court by indolence, oversight, acquiescence, or consent. A. Appeal as of Right. A. Appeal as of Right. __________________ The Appellate Rules require that an appellant's brief contain "a statement of the basis for jurisdiction in the court of appeals . . . with reference to the applicable facts to establish such jurisdiction." Fed. R. App. P. 28(a)(2)(ii). Complying, perhaps, with the letter of the rule, but not with its spirit, the government's brief states in a purely conclusory fashion only that its appeal is authorized under 28 U.S.C. 1291 (1988).16 Despite this blithe assurance, the government's entitlement to an appeal as of right under section 1291 is problematic. We explain briefly. ____________________ 16The statute provides in pertinent part, with exceptions not relevant here, that "the courts of appeals . . . shall have jurisdiction of appeals from all final decisions of the district courts of the United States . . . ." 28 U.S.C. 1291. 29 An appeal by the government in a criminal case must be specifically authorized by statute. See United States v. Sanges, ___ _____________ ______ 144 U.S. 310, 312 (1892). The appeal before us does not fit neatly into the confines of 18 U.S.C. 3731 (affording the United States a right of appeal from certain described orders in criminal cases, e.g., orders dismissing indictments, suppressing ____ evidence, or mandating the return of seized property), or any more specialized statute conferring a right of appeal on the government in criminal cases, e.g., 18 U.S.C. 3742(b) ____ (permitting the United States to appeal from certain sentencing determinations). And it is settled that, at least in the absence of very special circumstances, the general authorization contained in section 1291 is not sufficiently specific to authorize an appeal by the government in a criminal case. See, ___ e.g., Arizona v. Manypenny, 451 U.S. 232, 246-47 (1981) (citing ____ _______ _________ cases); United States v. Patterson, 882 F.2d 595, 599 (1st Cir. _____________ _________ 1989), cert. denied, 493 U.S. 1027 (1990). _____ ______ Notwithstanding this looming obstacle to appellate jurisdiction under section 1291, we believe that this case involves a sufficiently special set of circumstances to engage the exception rather than the rule. Some courts have suggested that, under what we choose to call the "special circumstance" exception, a government appeal may be entertained in a criminal case on the authority of section 1291 if the appeal satisfies the conditions of the so-called collateral order doctrine. See, ___ e.g., Carroll v. United States, 354 U.S. 394, 403 (1957) ____ _______ ______________ 30 (dictum); Patterson, 882 F.2d at 599; United States v. Powers, _________ _____________ ______ 622 F.2d 317, 319-20 n.2 (8th Cir.), cert. denied, 449 U.S. 837 _____ ______ (1980). Application of the collateral order doctrine is "limited to orders that (1) conclusively determine (2) important legal questions which are (3) completely separate from the merits of the underlying action and are (4) effectively unreviewable on appeal from a final judgment." Doughty v. Underwriters at _______ ________________ Lloyd's, London, 6 F.3d 856, 862 (1st Cir. 1993); see also Cohen _______________ ___ ____ _____ v. Beneficial Loan Corp., 337 U.S. 541, 546 (1949) (originating ______________________ doctrine). We think that these conditions are met in this case. Moreover, the particular circumstances at hand, especially the procedural posture in which this appeal arises and the nature of the relief sought, are conducive to allowing the appeal to go forward. In criminal cases, the policy against permitting appeals to be taken too freely is heightened by speedy trial and double jeopardy concerns. See Will v. United States, ___ ____ _____________ 389 U.S. 90, 96 (1967); DiBella v. United States, 369 U.S. 121, _______ _____________ 126 (1962). Here, those concerns do not come into play at all: the determination of the defendants' guilt has been made, sentence has been imposed, the attempted appeal is not interlocutory in any sense, and no prospect of piecemeal litigation endures. We conclude, therefore, that we have jurisdiction over the instant appeal under 28 U.S.C. 1291. We emphasize, however, that our holding is a narrow one. Rather than importing the collateral order doctrine lock, stock, and barrel into our 31 criminal jurisprudence, we hold only that when, as now, the conditions of the collateral order doctrine are satisfied,17 and the prudential concerns that traditionally militate against allowing the government to appeal in a criminal case favor, or are at least neutral in respect to, the availability of a government appeal, then section 1291 affords a vehicle through which the government may seek appellate review in a criminal case. B. Mandamus. B. Mandamus. ________ We are fortified in our resolve to hear and determine this appeal by the knowledge that, even if no appeal lies as of right, we possess and can appropriately exercise the power of discretionary review, via mandamus,18 to address the important question raised in this case. ____________________ 17We are not the first court to deem an assessment against the government qua prosecutor to be a collateral order for ___ jurisdictional purposes. See United States v. Baker, 603 F.2d ___ _____________ _____ 759, 761-62 (9th Cir. 1979) (per curiam) (entertaining government appeal, under section 1291, from district court's Rule 15(c) assessment against government of deposition-related attorneys' fees); United States v. Rogalsky, 575 F.2d 457, 459 (3d Cir. _____________ ________ 1978) (entertaining government appeal, under section 1291, from district court's assessment against government of costs arising from psychiatric examination of indigent defendant, see 18 U.S.C. ___ 3006A); but see In re Attorney General, 596 F.2d 58, 61 (2d ___ ___ _______________________ Cir.) (holding that contempt fine for discovery abuse against U.S. Attorney General is not a collateral order for purposes of section 1291), cert. denied, 444 U.S. 903 (1979). _____ ______ 18Technically, this case calls for the issuance of a writ of prohibition rather than a writ of mandamus. Because prohibition is simply the obverse of mandamus the two writs derive from the same source, see 28 U.S.C. 1651, and incorporate the same ___ standards we often use the two terms interchangeably. See In ___ __ re Pearson, 990 F.2d 653, 656 (1st Cir. 1993); Recticel, 859 F.2d __________ ________ at 1005 n.4. We do so here. 32 A federal court of appeals has the power to treat an attempted appeal from an unappealable (or possibly unappealable) order as a petition for a writ of mandamus or prohibition under the All-Writs Act, 28 U.S.C. 1651 (1988). See, e.g., United ___ ____ ______ States v. Sorren, 605 F.2d 1211, 1215 (1st Cir. 1979); see also ______ ______ ___ ____ United States v. Collamore, 868 F.2d 24, 27 (1st Cir. 1989) ______________ _________ (proceeding under mandamus powers where doubt existed as to propriety of asserting mandatory appellate jurisdiction). Mandamus is ordinarily appropriate in those rare cases in which the issuance (or nonissuance) of an order presents a question anent the limits of judicial power, poses some special risk of irreparable harm to the appellant, and is palpably erroneous. See In re Pearson, 900 F.2d 653, 656 & n.4 (1st Cir. 1993); ___ ______________ Recticel, 859 F.2d at 1005-06; see also Mallard v. United States ________ ___ ____ _______ _____________ Dist. Court, 490 U.S. 296, 308-09 (1989). In a still smaller ___________ class of cases, mandamus may lie even though all the usual standards are not met. See In re Arvedon, 523 F.2d 914, 915 (1st ___ _____________ Cir. 1975); In re Ellsberg, 446 F.2d 954, 956-57 (1st Cir. 1971); ______________ see generally 16 Charles A. Wright et al., Federal Practice and ___ _________ _____________________ Procedure 3934 (1977 & Supp. 1994). This tiny class of cases _________ involves what we have come to call advisory mandamus.19 ____________________ 19We think it is wise to distinguish supervisory mandamus from advisory mandamus. The former is used when an appellate court issues the writ to correct an established trial court practice that significantly distorts proper procedure. See, ___ e.g., United States v. Kane, 646 F.2d 4, 9 n.7 (1st Cir. 1981); ____ _____________ ____ Grinnell Corp. v. Hackett, 519 F.2d 595, 599 (1st Cir.), cert. _______________ _______ _____ denied, 423 U.S. 1033 (1975); see also La Buy v. Howes Leather ______ ___ ____ ______ _____________ Co., 352 U.S. 249, 256-60 (1957). This differs from advisory ___ mandamus in that, far from being novel, the problem sparking 33 Advisory mandamus has its roots in the Court's reference to mandamus review of "basic, undecided question[s]." Schlagenhauf v. Holder, 379 U.S. 104, 110 (1964). It is ____________ ______ appropriate when the issue presented is novel, of great public importance, and likely to recur. See In re Justices of Supreme ___ __________________________ Court of Puerto Rico, 695 F.2d 17, 25 (1st Cir. 1982). Advisory ____________________ mandamus is not meant to allow review of "interstitial matters of case administration," Recticel, 859 F.2d at 1006, or to ________ circumvent limits on appellate review of discretionary interlocutory rulings, see Sorren, 605 F.2d at 1216. Rather, ___ ______ advisory mandamus is reserved for big game. It "should primarily be employed to address questions `likely of significant repetition prior to effective review,' so that our opinion would assist other jurists, parties, or lawyers." In re Bushkin ______________ Assocs., Inc., 864 F.2d 241, 247 (1st Cir. 1989) (citation ______________ omitted).20 ____________________ supervisory mandamus has by definition manifested itself on many occasions. 20Because situations that properly call for the use of advisory mandamus "are hen's-teeth rare," In re Bushkin, 864 F.2d _____________ at 247, relatively few prototypes exist. This is not to say that the writ has fallen into desuetude. See, e.g., In re Globe ___ ____ ____________ Newspaper Co., 920 F.2d 88, 90 (1st Cir. 1990) (issuing writ of _____________ mandamus directing district court to grant members of press access to jury list, on theory that issue presented was "sufficiently novel and important" to warrant review); In re ______ Justices, 695 F.2d at 25 (indicating that advisory writ of ________ prohibition is an appropriate means by which to direct district court not to hear facial challenges to rules governing bar membership and dues); see also Nasuti v. Scannell, 906 F.2d 802, ___ ____ ______ ________ 811 n.15 (1st Cir. 1990) (suggesting advisory mandamus would be appropriate to clarify status of federal employee immunity under amendments to Federal Tort Claims Act). 34 If no right of appeal were to exist, the case before us today would be a prime candidate for advisory mandamus. The issue presented has never before been squarely decided; yet, it is likely to recur, given the pervasiveness of litigation abuse in modern practice. There is a sufficient showing of irreparable harm in the sense that, were no court to entertain either an appeal or a petition for mandamus, the matter might perpetually evade review. Finally, the issue bears importantly on the relationship between the Judicial Branch and the Executive Branch. We regard the case for mandamus here as especially compelling because it is important in the right way. It poses an elemental question of judicial authority involving precisely the sort of "Article III-type jurisdictional considerations" that traditionally have triggered mandamus review. In re Justices, _______________ 695 F.2d at 25; see also In re Pearson, 990 F.2d at 656 (noting ___ ____ ______________ that mandamus historically has been used to check judicial usurpation of power); In re Attorney General, 596 F.2d 58, 64 (2d ______________________ Cir.) (granting mandamus relief due in part to "separation of powers overtones"), cert. denied, 444 U.S. 903 (1979). _____ ______ In short, we believe that this attempted appeal, if not entertainable as of right under 28 U.S.C. 1291, would present a classic case for the granting of advisory mandamus. Either way, the government is entitled to the relief that it seeks. V. CONCLUSION V. CONCLUSION Having satisfied ourselves that appellate jurisdiction 35 inheres, we now recapitulate. We agree with the lower court that the government committed egregious acts of prosecutorial misconduct. We do not believe, however, that the court had the right to ignore sovereign immunity in responding to that misconduct. The court's supervisory power, although potent, cannot intrude, unaided, into the sovereign's protected preserves. We need go no further. Because principles of sovereign immunity bar a federal court from invoking its supervisory power to compel the federal government to pay attorneys' fees and costs as a sanction for prosecutorial misconduct in a criminal case, we reverse the orders of the district court insofar as they purport to shift such fees and costs. All parties shall bear their own costs in this court. Reversed. No costs. ________ ________ 36
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627 F.2d 1087
80-1 USTC P 9416
Unpublished DispositionNOTICE: First Circuit Local Rule 36.2(b)6 states unpublished opinions may be cited only in related cases.Frederick M. Egan, Plaintiff-Appellantv.Commissioner of Internal Revenue, Defendant-Appellee.
No. 79-1551.
United States Court of Appeals, First Circuit.
April 30, 1980.
1
Before ALDRICH and BOWNES, Circuit Judges, PETTINE,* U.S. District Judge.*
BOWNES, Circuit Judge
2
Appellant Frederick Egan appeals from the dismissal of his pro se complaint entitled "Show Cause Why the Department [sic -the Internal Revenue Service] Should Not be Stripped and Abolished." Although this document is nearly incomprehensible, we interpret it as an attempt to establish that the IRS had no authority to collect taxes from Egan in 1972 and 1973.
3
We conclude that the district court properly dismissed Egan's complaint. Because Egan had already litigated his tax liability for 1972 and 1973 in the Tax Court, whose adverse decision he did not appeal, the doctrine of res judicata barred a new lawsuit about this issue in the district court. See Commissioner v. Sunnen 333 U.S. 591, 598 (1948); United States v. Bottenfield 442 F.2d 1007, 1008 (3rd Cir.1971). See also 26 U.S.C. Sec. 6512. To the extent that Egan's complaint was also meant as a request for an injunction prohibiting the IRS from collecting taxes owed or compelling the IRS to discharge the tax lien mentioned in the complaint, relief was barred by the Anti-Injunction Act, the statutory and judicial exceptions to which do not apply in this case. 26 U.S.C. Sec. 7421(a); see Bob Jones University v. Simon 416 U.S. 725, 736-37 (1974).
4
Having read Egan's brief, we are, like the Tax Court, convinced of the sincerity of his tax protest. We are not, however, able to find any basis on which the district court could properly have entertained Egan's present lawsuit. Although it may be difficult for Egan to understand why the district court lacked authority to right the injustices he believes he has suffered, we must affirm the dismissal of his complaint.
*
Of the District of Rhode Island, sitting by designation
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60 N.J. 378 (1972)
290 A.2d 140
IN THE MATTER OF EDWARD A. RYAN, AN ATTORNEY AT LAW.
The Supreme Court of New Jersey.
Argued March 7, 1972.
Decided April 24, 1972.
*379 Mr. John George argued the cause for the Middlesex County Ethics Committee.
PER CURIAM.
Respondent stands convicted of having embezzled substantial sums of money belonging to clients. He has also admitted forging his clients' signatures by way of endorsement upon one or more checks and drawing a check upon his trustee account knowing that it would not be honored because of insufficient funds resulting from his own misappropriations.
Such conduct is of so reprehensible a nature as to permit of only one form of discipline.
It is the order of the Court that respondent's name be stricken from the roll of attorneys.
For disbarment Chief Justice WEINTRAUB and Justices JACOBS, FRANCIS, PROCTOR, HALL, SCHETTINO and MOUNTAIN 7.
Opposed None.
| {
"pile_set_name": "FreeLaw"
} |
650 F.2d 395
26 Fair Empl.Prac.Cas. 167,26 Empl. Prac. Dec. P 31,889Theresa J. STE. MARIE, individually and on behalf of allother persons similarly situated, Plaintiffs-Appellees,v.EASTERN RAILROAD ASSOCIATION and Traffic ExecutiveAssociation, Defendants-Appellants.
No. 815, Docket 80-9013.
United States Court of Appeals,Second Circuit.
Argued March 13, 1981.Decided May 29, 1981.Rehearing Denied July 13, 1981.
Sue Wimmershoff-Caplan and Teitelbaum & Hiller, New York City, for plaintiffs-appellees.
Myron D. Cohen, New York City (Conboy, Hewitt, O'Brien & Boardman, David Rees Davies, New York City, of counsel), for defendants-appellants.
Before FRIENDLY, MANSFIELD and KEARSE, Circuit Judges.
FRIENDLY, Circuit Judge:
1
This is an appeal from a final judgment in a sex discrimination class action in the District Court for the Southern District of New York under Title VII of the Civil Rights Act, 42 U.S.C. § 2002e-2, wherein Theresa J. Ste. Marie (Ste. Marie) is the named plaintiff and Eastern Railroad Association (ERA) and one of its components, Traffic Executive Association (TEA), are defendants. The gravamen of the complaint is that defendants discriminated against women in appointments to technical and managerial positions. The action has necessarily consumed a great deal of the time of Judge Carter over the last five years. The results of his labors are embodied in three published opinions, two of them lengthy, 72 F.R.D. 443 (1976) (class certification), 458 F.Supp. 1147 (1978) (liability), and 497 F.Supp. 800 (1980) (remedy), familiarity with which is assumed. In the first opinion, 72 F.R.D. 443, he certified Ste. Marie to represent a class consisting of all female employees of ERA. In the second opinion, 458 F.Supp. 1147, considering the case as presenting a claim of disparate treatment, he concluded that defendants had followed a policy and practice of sex discrimination during the relevant period, beginning 180 days prior to plaintiff's filing, in August 1974, of a charge of sex discrimination with the Equal Employment Opportunity Commission (EEOC). In the third opinion, 497 F.Supp. 800, he reviewed the claims of eleven employees who sought back pay or other individual relief and sustained seven. He also directed defendants to institute an elaborate program of job evaluation and classification of all positions throughout the organization. This included performance appraisal systems, publicization and explanation of performance ratings and review procedures, posting of all vacancies along with qualifications required to fill the positions, and much else, see 497 F.Supp. at 811. He awarded plaintiff's attorney a basic total fee of $140,670, plus a bonus of 10% of that amount, or $14,067, see City of Detroit v. Grinnell Corp., 495 F.2d 448, 471-72 (2 Cir. 1974), along with a fee for the services of a personnel expert, a statistical expert and his assistants, and costs. Defendants appeal from essentially all of the judge's rulings.
2
The number and difficulty of sex and race discrimination cases have increased to a point where it is neither practicable nor useful to write appellate opinions dealing in detail with every facet of each case. Decision turns on the particular history and practices of each employer, and opinions thus have limited precedential value. The guidelines for the determination of disparate treatment cases like this have been so clearly laid down by the Supreme Court in a series of cases beginning with McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and continuing through Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); Hazelwood School District v. United States, 433 U.S. 299, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977); Furnco Construction Co. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978); Board of Trustees of Keene State College v. Sweeney, 439 U.S. 24, 99 S.Ct. 295, 58 L.Ed.2d 216 (1979); and, most recently, Texas Department of Community Affairs v. Burdine, -- U.S. --, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), that there should be little need for intervention by courts of appeals. While unfortunately we find such a need to exist in this case despite the conscientious efforts of the district judge, we limit ourselves to our principal conclusions of error, without attempting to restate fully the complex and unique facts or to discuss every argument made by the parties. We are confident that when the case is reconsidered on remand, the district judge will deal with such further arguments as may still be pressed in light of the conclusions expressed in this opinion. However, a brief description of ERA's structure and past practices towards women is required.
3
ERA is an unincorporated association formed in 1970 to perform various traffic management and inspection services for its members, 23 northeastern railroads. It consists essentially of three component organizations: TEA, the Eastern Weighing and Inspection Bureau (EWIB) and the Railroad Perishable Inspection Agency (RPIA). TEA, with offices chiefly in New York City, analyzes proposals for rate and tariff changes submitted by member lines or shippers and makes recommendations, which are then voted upon by ERA's members. TEA also compiles and publishes tariffs and provides data processing services. EWIB monitors weight agreements and transit accounts between shippers and member lines and investigates loss and damage claims. It has 9 district offices. RPIA has offices in 32 cities. Its employees perform routine inspections for damage to shipments of perishable goods. The principal job classification in both EWIB and RPIA is that of inspector. Although there is no educational requirement for the position of EWIB inspector, an RPIA inspector must have completed two years of college education in agriculture, biology or bacteriology.
4
The district court found that prior to 1972 ERA hired women solely to fill secretarial positions and did not train them for responsibility in technical areas. Women were barred from participation in ERA's tuition refund program and "none were encouraged to attend Advanced Traffic School where they could have acquired basic technical skills to speed their advancement" in TEA. 458 F.Supp. at 1160. Except for positions in RPIA covered by a collective bargaining agreement, job vacancies were not advertised and promotions, initiated by management, were "based on the ad hoc subjective judgment of the appointing authority that a particular male employee had the necessary qualifications needed to fill the vacancy or to take on a new assignment." Id. at 1160-61. During this period, all ERA's managers and all inspectors were men. In 1972, however, pursuant to a conciliation agreement resulting from another Title VII charge, TEA agreed not to discriminate against women in the future. The tuition refund program was opened to women and women began attending Advanced Traffic School. Non-management positions in TEA were advertised and women were hired and promoted to fill a variety of technical positions in that organization. The significance of this history of discrimination antedating the commencement of liability and ERA's efforts to overcome it will emerge more fully below.
5
The overarching reason why the decision must be reversed is that the judge, having concluded, perhaps wrongly, that plaintiff had established a prima facie case, proceeded on the basis of a clearly improper standard as to the burden thereby placed on the defendant. He stated, 458 F.Supp. at 1165, that with the establishment of a prima facie case of sex discrimination "the burden shifted to the defendant to rebut plaintiff's case, and its failure to do so compels the conclusion that its policies and practices violate the Act." Continuing, he stated, 458 F.Supp. at 1165-66:
6
Disparate treatment of male and female employees can be sustained against a Title VII challenge only if the employer can establish business necessity justifying the disparity, or a bona fide occupational qualification reasonably necessary to the business operation. * * * A business necessity defense requires more than a mere showing that the questioned practices or policy served some legitimate managerial function, * * *. Instead, the challenged practices must be essential with no other reasonable alternative available. * * * Defendant's rebuttal evidence does not come close to meeting this standard. Accordingly, plaintiff has not only established a prima facie case of discrimination against defendant's female employees as a class, but she has met the ultimate burden of persuasion, * * * warranting the entry of judgment against defendant on the issue of liability.
7
This was error. It has been clear ever since McDonnell Douglas, supra, 411 U.S. at 802, 93 S.Ct. at 1824, that the burden that is shifted to the defendant by plaintiff's making out a prima facie case of disparate treatment a task described in Burdine as "not onerous", -- U.S. at --, 101 S.Ct. at 1093 is not a burden of persuading the trier of a business necessity to employ or promote a person belonging to the majority. The shifted burden is simply "to articulate some legitimate, nondiscriminatory reason for the (minority) employee's rejection." 411 U.S. at 802, 93 S.Ct. at 1824. This follows necessarily from the language and purpose of Title VII. The employer is not required to hire or promote a minority employee; rather he is forbidden to refuse to hire or promote such an employee because of race or sex. Hence he sufficiently rebuts a prima facie case by pointing to a business reason for his employment decision. By doing this he adequately negates, for the time being, the force of a plaintiff's initial showing that a qualified minority employee was denied employment or promotion which was given to a majority employee instead. The plaintiff then has the burden "to show that (the) stated reason was in fact pretext," 411 U.S. at 804, 93 S.Ct. at 1825, or, as later phrased, id. at 805, 93 S.Ct. at 1826, "that the presumptively valid reasons" for failure to hire or promote "were in fact a coverup for a racially (here sexually) discriminatory decision." Justice Powell's recent opinion in Burdine, supra,1 simply elaborates in a helpful fashion on the theme sufficiently sounded eight years ago in McDonnell Douglas from which the Court has never deviated. The district court's conclusion that defendants had followed a pattern and practice of disparate treatment must therefore fall as based on an erroneous allocation of the burden of proof.2
8
The district court's liability opinion is infected by other errors. The most significant flaw is its treatment of statistical data offered by plaintiff's expert which, in its words, "conclusively establishes plaintiff's claim of discrimination against women throughout defendant's work force at the managerial and technical levels," 458 F.Supp. at 1163, and of defendants' reports to the EEOC for 1974, 1975, 1976 and 1977. The statistical data showed the proportions of men and women in defendants' work force and in various categories in January, 1977 and January, 1975. Although plaintiff's expert claimed that the statistics showed discrimination in respect of salaries, the court found, 458 F.Supp. at 1156, there was no evidence of any salary disparities between men and women occupying the same position and that the gap between male and female employees in salary and salary expectations occurred because of the low representation of women in higher salaried positions. The data revealed by the statistics were as follows:
9
Clerical * Technical * Managerial * Total
Women 80 (69%) 35 (30%) 1 (1%) 116
1975 Men 31 (7%) 331 (76%) 74 (17%) 436
Women 77 (65%) 38 (32%) 3 (3%) 118
1977 Men 24 (6%) 323 (77%) 73 (17%) 420
* Percentage of women or men in ERA's total work force.
10
The expert then applied the percentages of the respective sexes in the ERA's total work force to the number of jobs in each category to find what he thought a sex-neutral distribution would be. He concluded that women were grossly overrepresented at the clerical level and underrepresented at the managerial and technical levels. For 1977 the shortfalls at the managerial and technical levels were 4.09 and 9.13 standard deviations, whereas the overrepresentation at the clerical level was 14.50 standard deviations.3 Citing Castaneda v. Partida, 430 U.S. 482, 496-97, 97 S.Ct. 1272, 1281-1282, 51 L.Ed.2d 498 (1977), and Board of Education v. Califano, 584 F.2d 576, 584 (2 Cir. 1978), aff'd sub nom., Board of Education v. Harris, 444 U.S. 130, 100 S.Ct. 363, 62 L.Ed.2d 275 (1979); see also Hazelwood School District v. United States, supra, 433 U.S. at 311 n.17, 97 S.Ct. at 2743 n.17, the judge thought that "the grossness of the statistical disparity shown," along with other factors noted by him,4 sufficed "to establish by a fair preponderance of the evidence that defendant has (been) and is subjecting its female employees to employment discrimination because of their sex." 458 F.Supp. at 1163-64.
11
There can be no doubt that standard deviations of this magnitude demonstrated that the low proportions of women in the technical and managerial categories were not the result of chance. But it was a quantum leap, under the circumstances of this case, to jump from that proposition to the conclusion that such high standard deviations proved or even had any tendency to prove that defendants had committed a legally cognizable wrong. Far from being conclusive against defendants, plaintiff's statistical evidence and the EEOC reports on which it was based were totally wanting in probative value.
12
There is no dispute that as a rule, openings were filled by promotions from within the organization primarily on the basis of skills acquired on the job, although in some instances the taking of technical courses was either required or highly recommended. However, several members of the class, including Ste. Marie, corroborated ERA's contention that secretarial and stenographic jobs did not provide the training that could lead to advancement in other work, and that this was understood by everyone. Our review of the record shows that of the 101 "clerical" jobs existing in 1977, at least 60 were secretarial, and these were filled almost exclusively by women.5 Plaintiff's statistics were hopelessly flawed by the lumping of these secretarial jobs into the "clerical" category, since these positions did not offer the incumbents the opportunity to acquire the skills and experience that would enable them to qualify for promotion to technical and still less to managerial posts.6 There is no principle requiring an employer following a policy of promoting from within to make this applicable across the board rather than only to those employee groups whose work gives them the opportunity to acquire the skills needed for promotion. Yet plaintiff's statistics gave the same weight to failure to promote secretaries and typists to posts requiring specialized substantive knowledge and experience as they did to failure to promote women working in other clerical positions that would permit them to obtain the essential skills. This methodology failed to heed the warning in Hazelwood School District v. United States, supra, 433 U.S. at 308 n.13, 97 S.Ct. at 2742 n.13: "When special qualifications are required to fill particular jobs, comparisons to the general population (rather than to the smaller group of individuals who possess the necessary qualifications) may have little probative value." Accord, EEOC v. Radiator Specialty Co., 610 F.2d 178, 185 (4 Cir. 1979); Grano v. Department of Development of City of Columbus, 637 F.2d 1073, 1078 (6 Cir. 1980).7
13
An error with respect to RPIA inspectors also vitiated plaintiff's statistical presentation. No member of the class satisfied the educational requirement for the position of RPIA inspector, which has been in effect since 1940 and the propriety of which was not questioned. Since service as an inspector is a prerequisite for promotion within RPIA, the educational requirement in effect applies as well to all the RPIA inspector positions classified by plaintiff as managerial. All 96 RPIA inspector positions classified as technical and the 36 positions classified as managerial for 1977 therefore should have been excluded from plaintiff's statistical calculations.
14
The third respect in which plaintiff's statistics were invalid on their face lay in their failure to recognize that a large proportion of the technical and managerial positions had been filled before February 3, 1974, the date when defendants' potential liability began, 42 U.S.C. § 2000e-5(e). As in Smith v. American President Lines, Ltd., 571 F.2d 102, 108-09 (2 Cir. 1978), we need not here decide whether the time bar of § 2000e-5(e) operates as a denial of jurisdiction or merely as a statute of limitations and thus subject to tolling an issue on which the circuits are divided and the Supreme Court has not yet spoken dispositively. Under either view, it is true, as was said in United Air Lines, Inc. v. Evans, 431 U.S. 553, 558, 97 S.Ct. 1885, 1889, 52 L.Ed.2d 571 (1977):
15
A discriminatory act which is not made the basis for a timely charge is the legal equivalent of a discriminatory act which occurred before the statute was passed. It may constitute relevant background evidence in a proceeding in which the status of a current practice is at issue, but separately considered, it is merely an unfortunate event in history which has no present legal consequences.
16
This principle is fully applicable to pattern or practice actions. In the Teamsters opinion, handed down on the same day as United Air Lines, Inc. v. Evans, the Court said that an employer might defeat a plaintiff's prima facie case by showing "that the claimed discriminatory pattern is a product of pre-Act hiring rather than unlawful post-Act discrimination." 431 U.S. at 360, 97 S.Ct. at 1867. See also Hazelwood School District v. United States, supra, 433 U.S. at 309-10, 97 S.Ct. at 2742-2743. Under United Air Lines, Inc. v. Evans, acts prior to 180 days before the charge are the equivalent of "pre-Act hiring." See Movement for Opportunity & Equality v. General Motors Corp., 622 F.2d 1235, 1245 (7 Cir. 1980); Patterson v. American Tobacco Co., 634 F.2d 744, 752 n.10 (4 Cir. 1980) (en banc), petition for cert. filed, 49 L.W. 3533 (Jan. 16, 1981); Association Against Discrimination in Employment, Inc. v. City of Bridgeport, 647 F.2d 256 at 274 (2 Cir. 1981).
17
As best we can discern, at least 45 of the 83 EWIB inspectors classified as technical in 1977 had been appointed to that position prior to February, 1974. All 11 EWIB inspectors at the managerial level had originally been hired prior to the period of potential liability; since inspector experience was an important qualification for promotion to those jobs, it seems fair to assume that even if class members had been hired as inspectors after February 1974, they would not have been eligible for promotion to the five management posts filled that same year or to the three additional ones filled later. Hence, these 45 technical and 11 managerial EWIB inspector positions were closed to members of the class by virtue of employment decisions that predated the onset of ERA's potential liability.8 It also appears that 41 cooper positions in RPIA and EWIB, as well as 23 of 27 executive positions in TEA had been filled prior to February, 1974. All of these posts were occupied by men.
18
The list could go on, but the effect on plaintiff's statistical evidence of the errors already noted is devastating. Using figures from 1977, the exclusion of 45 EWIB inspectors, 96 RPIA inspectors and 41 coopers reduces the number of "open" technical positions from 361 to 179. Of 76 managers listed by plaintiff, the exclusion of 11 EWIB and 36 RPIA inspector-managers and 23 TEA executives leaves only 6. Even if one were to use plaintiff's methodology of applying the female percentage of the entire work force to these remaining positions, a methodology which is seriously flawed by the inclusion of secretaries and typists, one would expect 21.9% of the technicals or 39, and a like percentage of the managers or 1.3, to be women. The discrepancy between these expected figures and the actual numbers of 38 women technicals and 3 women managers lacks statistical significance, particularly in a small sample of this sort. If secretaries and typists are excluded, the percentage of promotable women in ERA's work force is reduced to 12.3%, and the expected figures drop to 22 women technicals and .7 women managers.9
19
The district court erred also in assessing the evidence introduced by ERA to explain why no women had been engaged as RPIA inspectors until 1977, when two were hired. Defendants offered evidence that the job of an RPIA inspector is hazardous, necessitates heavy work, and involves crawling, lifting and bending. Also, particularly with respect to new hires, the work is done in the early morning, late at night and on week-ends in areas with high crime rates. Two recruiters for RPIA testified that, over the years, their enlistment efforts at agricultural colleges yielded about 210 applicants for the job of RPIA inspector, only 11 of whom were women; that two women offered such positions declined them; and that others expressed reservations about working under the conditions described.
20
The judge refused "to credit testimony that few women were interested in working as inspectors for RPIA based on the recruitment and interviewing of students at agricultural colleges." 458 F.Supp. at 1164. This refusal was not based on the witnesses' demeanor or on any conflicting evidence but rather on the ground that the testimony was "conclusory," this apparently meaning that the interviewers did not expect many women to be interested. Id. The judge also faulted defendants for not introducing evidence of the number of women enrolled in agricultural colleges, and added, id.: "In any event, whatever the actuality, the burden was defendant's to carry, and it has failed to do so." ERA's explanation of the dearth of women inspectors as rooted in the hazards and hardships of the job was rejected by the court as consisting of "no more than culturally biased, stereotyped concepts." Id. at 1165.
21
These findings reflect several errors. As we explained at the outset, it was error to assign the burden of proof to the defendants. It was also error to subject defendants to liability for failure to hire women RPIA inspectors from agricultural colleges; the class consisted solely of women already employed by ERA, and discrimination against non-members in initial hiring decisions would not have constituted discrimination against the class. Granting that evidence of disparate treatment of non-members, like pre-Act and time-barred discriminatory decisions, would be background evidence of a pattern or practice of discrimination against the class, the district court nevertheless erred in refusing to credit defendants' explanation. This was not based on what the judge characterized as "culturally biased, stereotyped concepts" of women's inability to perform hazardous or physically demanding work. The interviewers did not assert this as a justification for their failure to hire women who applied; rather they offered it to explain the lack of applications and to support their view, based on experience, that young women who had spent years in attending agricultural college would find other types of work more attractive than nocturnal prowling in railroad yards inspecting rotten food. Plaintiff offered no testimony that any women who had applied for RPIA inspectors jobs had been refused.10 The fact that defendants had finally found two women willing to accept does not disprove their assertion that they had not theretofore been able to do this, as the judge seems to have thought, 458 F.Supp. at 1164. If this acceptance had occurred before suit was brought, it would have strengthened defendants' case. Although it has less weight of this sort when it comes during the pendency of the suit, see, e. g., Jenkins v. United Gas Corp., 400 F.2d 28, 33 (5 Cir. 1968); Gamble v. Birmingham Southern R.R. Co., 514 F.2d 678, 683 (5 Cir. 1975), it still is insufficient to establish that defendants were lying when they said they had had no such success before.
22
The court also appears to have erred in failing to give proper weight to the problems confronting ERA in eliminating the effects of past discrimination against women in managerial positions. In February 1974, these posts were held exclusively by men and only a few positions have since opened up. In filling these posts ERA was not obliged to promote any specific number or percentage of women. The statute "does not require the employer to restructure his employment practices to maximize the number of minorities and women hired." Texas Department of Community Affairs v. Burdine, supra, -- U.S. at --, 101 S.Ct. at 1097, citing Furnco Construction Co. v. Waters, supra, 438 U.S. at 577-78, 98 S.Ct. at 2949-2950. The court seemingly prescribed a too rigorous standard when, after acknowledging that many of ERA's past discriminatory practices were no longer operative and that the case was limited to conduct occurring after February 3, 1974, it went on to state, 458 F.Supp. at 1161:
23
Consideration of defendant's past discriminatory practices are relevant to determine whether current prophylactic steps have eliminated all vestiges of the former gender-based discrimination.
24
If by this the court meant only that ERA was bound to eliminate any current discriminatory practices, that would be sound enough. However, we read the opinion as going further and insisting that defendants should have taken affirmative steps to cause the sex distribution in its higher level positions to conform to the distribution in its total work force.11 Such a view runs counter to Furnco and Burdine. As the Seventh Circuit said in Movement for Opportunity & Equality v. General Motors Corp., supra, 622 F.2d at 1245:
25
The residue of past discrimination is not immediately eliminated. In the instant case, it is more relevant to look not at a workforce makeup on a given day, but to the chances (the defendant) had to change its percentage of women minorities through current hiring decisions.
26
When these corrections are made, about all that is left of plaintiff's case apart from the seven instances of individual discrimination found in the remedies portion is ERA's history of discrimination prior to 1972 and the looseness of its promotion and hiring practices. Concerning the latter, the district court found that many openings were not advertised, and that the qualifications for those that were posted were ad hoc and home made, drawn up solely on the basis of the department head's views. The test administered to applicants for one position was also home made and the scoring bizarre. There were no written, objective criteria for evaluating a candidate's qualifications and no procedures to insure against discriminatory practices. Defendants argue that these practices are not enough to establish a pattern or practice as distinguished from individual acts of discrimination, that their record prior to 1972 is not probative of discrimination after February 1974, and that the pattern or practice aspect of plaintiff's case should be dismissed.
27
We would accept defendants' analysis, if we were sure that the voluminous record did not contain other probative evidence with respect to post-February 1974 discrimination. However, the joint appendix submitted by the parties runs to 10 volumes containing more than 3000 pages, while the selected exhibits compiled for our perusal number more than 80. The opinions of the district judge and the briefs of the parties necessarily were limited to emphasizing the more salient aspects of the record and it is possible, although unlikely, that there may be additional evidence of record, not yet brought to our attention, which would have a bearing on the question whether plaintiff has proved the existence of a pattern or practice. The district judge, having presided over these extended proceedings, is in a better position than an appellate panel to perform the task of collecting and evaluating the evidence in this exceedingly long record. We therefore remand this portion of the case to the district court for reconsideration on the present record, with the exception that plaintiff shall be ruled not to have sustained her burden of persuasion with respect to the RPIA inspectors.
28
It will nevertheless be conserving of the parties' and our own resources if we take this opportunity to set forth our views on the sufficiency of the non-statistical evidence with which we have already become familiar. This consists of the subjectivity of ERA's hiring and promotion procedures, ERA's past history of discrimination, and the seven findings of individual acts of discrimination. While evidence of subjective and discretionary promotion and transfer procedures may indeed strengthen the inference of a pattern or practice of purposeful discrimination that can be drawn from a valid statistical showing of disparities in the work force, see, e. g., Stewart v. General Motors Corp., 542 F.2d 445, 450-51 (7 Cir. 1976), cert. denied, 433 U.S. 919, 97 S.Ct. 2995, 53 L.Ed.2d 1105 (1977); James v. Stockham Valves & Fittings Co., 559 F.2d 310, 330 (5 Cir. 1977), cert. denied, 434 U.S. 1034, 98 S.Ct. 767, 54 L.Ed.2d 781 (1978); Grant v. Bethlehem Steel Corp., 635 F.2d 1007 (2 Cir. 1980), petition for cert. filed, 49 L.W. 3808 (Apr. 17, 1981), this is because the statistical disparities in such a case are evidence that the potential for disparate treatment created by loose procedures has been realized on a significant scale. But when, as here, relevant statistics are lacking and the probative evidence of discrimination is confined, as we are assuming, to seven individual incidents, subjective decisionmaking methods are not sufficient to establish a pattern or practice of discrimination;12 all that could be inferred is that their potential has been actualized in the same seven cases.
29
We also are not inclined to perceive sufficient additional support for a finding of a pattern or practice in plaintiff's evidence of discrimination in the years preceding 1972. We recognize that proof of past discrimination "might in some circumstances support the inference that such discrimination continued, particularly where relevant aspects of the decisionmaking process had undergone little change." Hazelwood School District v. United States, supra, 433 U.S. at 309 n.15, 97 S.Ct. at 2742 n.15; see Grant v. Bethlehem Steel Corp., supra, 635 F.2d at 1017. Here, however, the evidence of sex-based discrimination antedating 1974 seems to have concerned TEA exclusively, and it is undisputed that since 1972 significant progress has been made in eradicating discrimination in that organization. Although the procedures for promotion remained largely unchanged, this did not prevent sizable numbers of women from advancing through TEA's ranks where none had gone before. Under the circumstances of this case, TEA's record of discrimination prior to 1972, like the evidence of ad hoc procedures, does not significantly augment the district court's seven findings of discriminatory treatment.
30
The difficult question is whether assuming arguendo the accuracy of the district court's individual determinations, these seven acts, consisting of three denials of promotions to technical positions in TEA, two rejections of applications for EWIB inspector jobs, and two failures to promote women to managerial status in TEA, could be held to amount to a pattern or practice of purposeful discrimination. Teamsters instructs that plaintiff's task was to "prove more than the mere occurrence of isolated or 'accidental' or sporadic discriminatory acts"; rather she had to show that discrimination "was the company's standard operating procedure the regular rather than the unusual practice." 431 U.S. at 336, 97 S.Ct. at 1855 (footnote omitted). The Court set out Senator Humphrey's explanation:
31
(A) pattern or practice would be present only where the denial of rights consists of something more than an isolated, sporadic incident, but is repeated, routine, or of a generalized nature. There would be a pattern or practice if, for example, a number of companies or persons in the same industry or line of business discriminated, if a chain of motels or restaurants practiced racial discrimination throughout all or a significant part of its system, or if a company repeatedly and regularly engaged in acts prohibited by the statute.
32
The point is that single, insignificant, isolated acts of discrimination by a single business would not justify a finding of a pattern or practice
33
Id. at 336 n.16, 97 S.Ct. at 1855 n.16. Later in its opinion, the Court observed that an employer could rebut a prima facie showing of a pattern or practice by demonstrating that "during the period it is alleged to have pursued a discriminatory policy it made too few employment decisions to justify the inference that it had engaged in a regular practice of discrimination." 431 U.S. at 360, 97 S.Ct. at 1867 (footnote omitted).
34
On the evidence before us it could not seriously be maintained that ERA practiced sex-based discrimination across the board during the period of its potential liability; within TEA, women generally have been promoted to technical positions on an equal basis with men. This fact stamps as "isolated" the three discriminatory decisions which denied promotions to technical positions in TEA. What remains are the questions whether plaintiff has met her burden of persuasion in asserting a regular practice of discrimination in appointments to inspector positions in EWIB, and to managerial posts in TEA. As for the inspector positions, plaintiff's evidence consists solely of two applications by class members for the job of EWIB inspector, both of which the district court found were denied due to the applicants' sex.13 In one of these instances, the woman applied for a position in the Detroit office and the application was sent to New York for review, the only time this practice had ever been followed. In the other case, the director of EWIB admitted that sex was the reason for rejection.
35
We are of the view that these two incidents would be insufficient to support the inference of a routine or regular practice of discrimination with respect to EWIB inspector appointments. While the definition of a pattern or practice is not capable of a precise mathematical formulation, see United States v. Jacksonville Terminal Co., 451 F.2d 418, 441 (5 Cir. 1971), cert. denied, 406 U.S. 906, 92 S.Ct. 1607, 31 L.Ed.2d 815 (1972), more than two acts will ordinarily be required. See Presseisen v. Swarthmore College, 442 F.Supp. 593, 608 (E.D.Pa.1977), aff'd mem. 582 F.2d 1275 (3 Cir. 1978); Miller v. Continental Can Co., 25 E.P.D. P 31,543 at 19,227 (S.D.Ga.1981). If there were evidence that a policy of discrimination had been adopted, perhaps two or even one confirmatory act would be enough. But the evidence with which we are acquainted is not of that ilk. The statement by the EWIB director that the applicant was being rejected for the particular position on account of her sex seems to have been merely an open admission of disparate treatment in that instance, not an announcement of a policy of general application. Similarly, the fact that the other woman's application precipitated the only instance of review by the New York headquarters, although having a tendency to show disparate treatment and the involvement of top management officials, does not establish that sex discrimination was a matter of company policy. Indeed, had sex discrimination been the routine procedure, there would have been no need for the unusual step of sending the application to the central office for additional consideration.
36
The district court found only two women who were denied managerial positions in TEA because of their sex. During the same period a third woman was elevated to executive status and a fourth received a promotion to an executive vacancy. It would not be necessary to give very much weight to these latter appointments, even though made after the filing of the complaint in this action, to conclude that plaintiff failed to establish by a preponderance of the evidence that TEA routinely denied women promotions to management positions. With only a handful of opportunities for bringing women into its managerial ranks, TEA raised two women and rejected two others. This hardly constitutes proof that purposeful discrimination was standard operating procedure. Barring the discovery of additional probative evidence in the record, we thus do not believe, on what has been called to our attention, that plaintiff has made out a pattern or practice of disparate treatment in managerial appointments.14
37
We have considered whether, despite the errors in connection with the pattern or practice holding, the court's conclusions in Part III of its remedy opinion, 497 F.Supp. at 804-11, awarding relief to seven discriminatees, could not be sustained either in whole or in part. However, we must assess all these conclusions in light of the court's statement at the beginning of Part II of the same opinion, 497 F.Supp. at 803:
38
At this stage of the proceeding a rebuttable presumption is operative that each member of the class was discriminated against because of her sex, and that various employment decisions during the period when unlawful discrimination was found to exist were made in pursuit of the employer's unlawful policy. The burden rests upon the employer to overcome that presumption.
39
This accurately stated the law, assuming that a pattern or practice had been shown, see Teamsters v. United States, supra, 431 U.S. at 360-62, 97 S.Ct. at 1867-1868; Franks v. Bowman Transportation Co., 424 U.S. 747, 772-73, 96 S.Ct. 1251, 1268, 47 L.Ed.2d 444 (1976), but our reversal has now brought that assumption into serious question. We cannot be sufficiently certain that the determinations that seven employees were the subject of sex discrimination were not influenced by this presumption,15 and therefore deem it necessary also to remand this portion of the case to the district court for a reconsideration of the record.
40
The defendants' attack on the certification of the class is without merit. While we do not agree with defendants' criticisms of the district court's award of attorneys' fees and expenses, our reversal of the court's holding on the pattern or practice issue may ultimately entail a reduction. The propriety of the injunctive relief awarded by the district court will have to await the decision on remand.
41
The judgment is reversed and the cause remanded for further proceedings consistent with this opinion. This panel will retain jurisdiction.
PER CURIAM:
42
Plaintiffs-appellees have filed a petition for reconsideration. This raises two points relating to the merits and one concerning costs.
43
One of the points concerning the merits, namely, that we erred in our holding with respect to secretaries and typists, 401, is wholly lacking in force. The record is clear that these employees did not obtain on-the-job experience that would qualify them for promotion to technical or managerial positions in TEA, EWIB or RPIA. As pointed out in fn. 7, p. 401, it was possible for secretaries to transfer laterally to nonsecretarial entry level jobs that offered the kind of training necessary for promotion in rate, tariff, data processing or inspection work. They would properly belong in the statistics when they effected such transfers not, as plaintiffs' expert treated them, before.
44
Plaintiffs complain with more merit about fn. 2, p. 399, in which, relying on a statement by the district judge, 458 F.Supp. 1147, 1160 (S.D.N.Y.1978), we held that the case had been tried below on a theory of disparate treatment and could not now be converted on appeal into one of disparate impact. Further examination of the record discloses that plaintiffs did make two rather limited claims of disparate impact, relating to the requirements of rate experience for promotion to managerial levels in TEA and of inspector experience for promotion within EWIB. However, if we were mistaken in some degree in footnote 2, the error was of no consequence. Considering the small number of appointments to managerial positions in EWIB and TEA that became available after February, 1974, and other facts alluded to in our opinion, particularly those at pp. 402-403, 405, 406-407, we are satisfied that a claim of disparate impact of the two policies here in question could not have been sustained.
45
Our opinion did not deal explicitly with the question of costs. Since the judgment was stated to have been "reversed" and the court had not "otherwise ordered", F.R.A.P. 39(a), defendants-appellants filed a bill of costs of $22,812.08, which included $17,768.06 for a voluminous joint appendix and collection of exhibits. Plaintiffs point out that defendants did not prevail on all issues and that the cause was remanded for further consideration. Hence it might be more accurate to regard the judgment as "reversed in part" in which event "costs shall be allowed only as ordered by the court", id. Ste. Marie, the named plaintiff, argues also that imposition of costs far exceeding her individual claim might inhibit further prosecution of the action. Her request is that the court direct each party to bear its own costs. We think it preferable to hold the question of costs on this appeal in abeyance until final judgment has been rendered by the district court and any appeal therefrom has been decided by us.
46
Except with respect to costs, the petition for rehearing is denied.
1
The following extract is especially pertinent:
The burden that shifts to the defendant, therefore, is to rebut the presumption of discrimination by producing evidence that the plaintiff was rejected, or someone else was preferred, for a legitimate, nondiscriminatory reason. The defendant need not persuade the court that it was actually motivated by the proffered reasons. See Sweeney, supra, at 25 (99 S.Ct. at 296). It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff. To accomplish this, the defendant must clearly set forth, through the introduction of admissible evidence, the reasons for the plaintiff's rejection. The explanation provided must be legally sufficient to justify a judgment for the defendant. If the defendant carries this burden of production, the presumption raised by the prima facie case is rebutted, and the factual inquiry proceeds to a new level of specificity. Placing this burden of production on the defendant thus serves simultaneously to meet the plaintiff's prima facie case by presenting a legitimate reason for the action and to frame the factual issue with sufficient clarity so that the plaintiff will have a full and fair opportunity to demonstrate pretext. The sufficiency of the defendant's evidence should be evaluated by the extent to which it fulfills these functions.
The plaintiff retains the burden of persuasion. She now must have the opportunity to demonstrate that the proffered reason was not the true reason for the employment decision. This burden now merges with the ultimate burden of persuading the court that she has been the victim of intentional discrimination. She may succeed in this either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence. See McDonnell Douglas, supra, at 804-805, 93 S.Ct. at 1825-1826.
-- U.S. at --, 101 S.Ct. at 1094-1095 (footnotes omitted).
2
This basic error of the district court may have come from applying the burden which a defendant would bear in rebutting a prima facie case of disparate impact. Indeed, plaintiff contends on appeal that the evidence makes out a case under a disparate impact as well as a disparate treatment theory. We reject this belated attempt to introduce a new theory of liability. As the district court's liability opinion made clear, 458 F.Supp. at 1160, the case was tried and decided below, with the consent of both parties, on a theory of disparate treatment. To hold the defendants to the more stringent burden applicable in a disparate impact case at this date would be manifestly unfair
3
For 1975 the corresponding figures were -4.50, -9.26 and k 14.64 standard deviations
4
These were "home made (job) tests, job descriptions and qualifications, the lack of objective criteria, the total discretion given the department head to make the choice and the absence of any restraint to prevent discrimination." 458 F.Supp. at 1163-64
5
Although plaintiff does not challenge ERA's initial hiring practices, it is worth mentioning the Department of Commerce figures offered by defendants which showed that 98.5% of the country's qualified secretarial force is female. A high proportion of women in these positions was thus without significance
6
The district court did not expressly address this issue, but it did reject "as unproved" ERA's contention that experience as a rate clerk in TEA was necessary for advancement to the higher reaches of that organization, stating:
On the basis of this record, defendant has failed to establish that the absence of women from top management positions is due to a lack of experience and training as rate clerks
458
F.Supp. at 1153. This conclusion was erroneous insofar as it put the burden of proof on the defendants, see supra. Moreover, the counterexamples supplied by the district court, which included one executive who started as an office boy in 1934, and one who was hired as a manager after ten years of experience in rate and tariff matters with the ICC, are hardly probative of what ERA's promotion policies were during the period following February, 1974. Even if it were shown that ERA made occasional exceptions in particularly meritorious cases to its rule of requiring rate clerk experience, this would not detract from ERA's point that statistics which ignore that general requirement are lacking in probative value
7
It was possible for secretaries to transfer laterally to nonsecretarial entry-level jobs that offered the opportunity for promotion, and it appears that in several instances this was either done or attempted. However, plaintiff's statistical methodology would not yield probative results unless it is assumed that these lateral moves were the rule rather than the exception. Such an assumption has no support in the record
8
Comparable figures exist for the RPIA inspectors
9
It could perhaps be argued that the 37 technical EWIB inspector positions filled after February 1974 should have produced at least 5 or 8 women, depending upon the percentage used, rather than the lone woman hired in 1977. This would assume, however, that ERA's employees were as willing to transfer laterally to an entry-level job as they were to advance in the type of work they were already performing. The record belies this assumption: only two members of the class applied for transfer to the entry-level EWIB inspector jobs during the relevant period. Moreover, ERA offered an explanation for the lack of female applicants, to wit, the laborious nature of the work, which the plaintiff did not show to be false. See infra. The application of plaintiff's statistical methodology to the EWIB inspector positions is therefore not justified by this record
10
Proof that applications of qualified women had been denied whereas those of men had been simultaneously accepted would have constituted exceedingly probative evidence that defendants' explanation was pretextual, and the absence of such evidence is almost equally relevant
11
The court's remark immediately followed its observation that "policies which perpetuate past discrimination into the present, absent a clear showing of business necessity, violate Title VII." Even if this principle still applies, after United Air Lines, Inc. v. Evans, supra, to past acts of discrimination which are time-barred, see Case Comment, Past Discrimination and Present Violations of Title VII, 92 Harv.L.Rev. 757 (1979) a question we need not decide it would nevertheless be true that the employer's duty is merely one of not discriminating, not one of achieving sexual balance, as the district court implied
12
A different case would be presented if there were evidence that the challenged procedures had been adopted with the intent of facilitating discriminatory treatment. We are unaware of any such evidence in the record
13
It appears that, unlike openings for technical positions in RPIA and TEA, vacancies in EWIB were not advertised until 1978. However, in light of the fact that two women did manage to apply and of ERA's untarnished evidence that women generally were not interested in inspector positions, we would not be willing to assume, absent evidence to the contrary, that the dearth of applications from women was due to a general knowledge of the futility of applying
14
While it seems to us that plaintiff is best understood as alleging separate patterns or practices in appointments to inspector positions and to managerial posts, if we were to lump together indiscriminately the seven alleged acts of individual discrimination and to consider as well the nondiscriminatory pattern in hiring and promotions in technical positions within TEA, this would only strengthen our perception that plaintiff's evidence shows sporadic, not routine discrimination
15
See the statement in dealing with the claim of Nancy DiGisi, 497 F.Supp. at 807, "Defendant has failed to meet its burden of proving that nondiscriminatory criteria were the basis for the failure to appoint DiGisi."
| {
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 15a0080n.06
No. 14-1090
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
)
In re: SETTLEMENT FACILITY DOW CORNING )
FILED
TRUST. )
Jan 27, 2015
_____________________________________ ) DEBORAH S. HUNT, Clerk
)
DOW CORNING CORPORATION; DEBTOR’S )
REPRESENTATIVES; THE DOW CHEMICAL ) ON APPEAL FROM THE
COMPANY; CORNING, INCORPORATED, ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
Interested Parties - Appellants,
) DISTRICT OF MICHIGAN
v. )
) OPINION
CLAIMANTS’ ADVISORY COMMITTEE; )
FINANCE COMMITTEE, )
)
Interested Parties - Appellees. )
Before: BOGGS and COOK, Circuit Judges; and QUIST, District Judge.*
BOGGS, Circuit Judge. In this bankruptcy case, the bankrupt company challenges the
district court’s authorization of payments to lower-priority creditors, when not all higher-priority
creditors have yet been paid, as contrary to the requirements of the bankruptcy plan. In 1995,
Dow Corning filed for bankruptcy in response to numerous tort claims and established the
Settlement Fund to pay known and future claimants between 2004 and 2019. The Settlement and
Fund Distribution Agreement (“SFA”) permits early payments to lower-priority creditors subject
to a district-court determination that such payments would not jeopardize future payments to
higher-priority creditors. The SFA Finance Committee, with the support of the Claimants’
*
The Honorable Gordon J. Quist, United States District Court for the Western District of Michigan, sitting by
designation.
1
Advisory Committee (“CAC”), requested that the district court authorize Premium Payments, a
category of lower-priority payments, and the district court approved. Dow Corning and its
shareholders, Dow Chemical and Corning Incorporated, appeal the district court’s judgment on
the ground that the court failed to follow SFA requirements. We reverse and remand.
I. BACKGROUND
In order to settle thousands of breast-implant-related product-liability lawsuits, Dow
Corning filed for bankruptcy under Chapter 11 of the Bankruptcy Code in 1995.1 In re Dow
Corning Corp., 280 F.3d 648, 653-54 (6th Cir. 2002). In 1999, the Bankruptcy Court for the
Eastern District of Michigan confirmed the Amended Joint Plan of Reorganization (“Plan”), id.
at 654, which became effective on June 1, 2004, In re Settlement Facility Dow Corning Trust,
No. 00-00005, 2013 WL 6884990, at *1 (E.D. Mich. Dec. 31, 2013).
The Plan provides that the United States District Court for the Eastern District of
Michigan will “resolve controversies and disputes regarding interpretation and implementation
of the Plan and the Plan Documents.” Plan § 8.7.3. The Plan provides for payments to claimants
until the end of 2019, up to an aggregate cap of $2.35 billion net present value (“NPV”).2
Claimants have the option of settling through a Settlement Facility or litigating against a
Litigation Facility. Id. § 5.4-5.4.2. A $400-million-NPV Litigation Fund is reserved for the
Litigation Facility, and $1.95 billion NPV is reserved for the Settlement Fund. Id. § 5.3; SFA
§ 3.02(a). Any assets remaining in the Litigation Fund at the end of 2019 revert to Dow
Corning. Litigation Facility Agreement § 8.03(b). If all settlement claimants are paid in full, the
CAC is authorized to disburse all remaining assets in the Settlement Fund to approved claimants
1
Unlike most bankruptcy debtors, Dow Corning was solvent when it filed and has remained so since that time. In re
Dow Corning Corp., 456 F.3d 668, 671 (6th Cir. 2006 ).
2
Net present value (NPV) expresses all payments from 2004 to 2019 in terms of the aggregate value of such
payments as of June 1, 2004. Plan § 1.102. The discount rate used for calculating NPV is 7% compounded
annually. Ibid.
2
on a pro rata basis, if cost effective, or to a medical research institute or university. SFA
§ 10.03(b).
The Settlement Facility–Dow Corning Trust (“Settlement Facility”) resolves the claims
of those who settle. Plan § 1.154. The Finance Committee “is responsible for financial
management of the Settlement Facility, including preparing recommendations to the District
Court regarding the release of funds for payment of Claims resolved by the Settlement Facility
and the Litigation Facility.” Id. § 1.67. The CAC represents claimants’ interests, and the
Debtor’s Representatives represent Dow Corning’s interests. SFA § 4.09.
The SFA establishes four categories of payments: First Priority Payments, Settlement
Fund Other Payments, Second Priority Payments, and Litigation Payments. Id. § 7.01(a). First
Priority Payments includes all “base” payments identified in the settlement value chart that
specifies the value of each type of claim. Ibid. Settlement Fund Other Payments include
payments to certain classes of creditors and are considered a type of First Priority Payments.
Ibid. Second Priority Payments are divided into three subcategories: (1) Premium Payments for
certain classes of claimants; (2) Increased Severity Payments for certain claimants whose
conditions worsen; and (3) Class 16 payments, which reimburse Dow Chemical for settlement
payments made before the Plan came into effect in 2004. Ibid. Litigation Payments include
various litigation-related expenses. Ibid. Premium Payments are at the heart of this dispute.
They include an extra 20% payment to approved-and-paid First Priority claimants who meet
certain criteria and an extra 25% payment to approved-and-paid First Priority claimants who
suffered an in-body implant rupture. Ibid. Annex B, Settlement Grid Personal Injury Claims.
In order to distribute Second Priority Payments—including Premium Payments—before
all First Priority and Litigation Payments have been made, the Finance Committee must obtain
3
authorization from the district court. Id. § 7.03(a). The court may grant authorization only after
it holds a hearing and determines that “all Allowed and allowable First Priority Claims and all
Allowed and allowable Litigation Payments have been paid or that adequate provision has been
made to assure such payment . . . .” Ibid. (emphasis added). The SFA further notes that “[t]he
parties agree that any appeal of an order of the District Court regarding the [authorization of
Second Priority Payments] shall be on an abuse of discretion standard.” Ibid.
In 2011, the Finance Committee requested that the district court authorize it to distribute
50% of historical and future Premium Payments before all First Priority and Litigation Payments
have been disbursed. The Finance Committee supported its recommendation with an assessment
from the SFA’s Independent Assessor, Analysis Research Planning Corporation (“ARPC”).
ARPC concluded that $1.981 billion NPV is available in the Settlement Fund,3 and that it would
cost $1.83 billion NPV to pay all First Priority claims, leaving $151 million NPV. The Finance
Committee relied upon this assessment to estimate that a fifty-percent disbursement of historical
and future Premium Payments would cost $83 million NPV, leaving a $68-million-NPV
“cushion” in the Settlement Fund. The Finance Committee argued that this demonstrated
adequate provision to assure payment of all First Priority Payments, and further reassured the
district court that an additional $368 million in the Litigation Fund could be available to make
First Priority Payments in the event such required payments exceeded the balance in the
Settlement Fund. The CAC supported the Finance Committee’s recommendation.
The Appellants opposed the Finance Committee’s recommendation on several grounds at
the payment-authorization hearing before the district court. First, they argued that the SFA
3
This figure exceeds the $1.95 billion funding cap of the Settlement Fund because the Settlement Fund paid
$31 million to satisfy Litigation Claims. Therefore, the “Settlement Fund [will] not be exhausted until Dow Corning
[is] called upon to make Qualified Transfers of approximately $1.981 billion (i.e., $1.95 billion plus $31 million).”
Appellee’s Br. at 13 n.1.
4
requires that the ability to make First Priority Payments must be “virtually guaranteed” before
Second Priority Payments, including Premium Payments, can be made, and that the Finance
Committee did not meet this burden. In support of this argument, the Appellants submitted to
the district court reports and testimony that undermined the reliability of ARPC’s projections.
Second, the Appellants disputed the Finance Committee’s position that assets in the Litigation
Fund could be counted as available when the district court assessed whether adequate provision
exists to make all First Priority Payments. Finally, they contended that making Premium
Payments without simultaneously making other Second Priority Payments would violate the SFA
by treating same-priority creditors differently.
Interpreting the “adequate provision . . . to assure payment” language in § 7.03(a), the
district court rejected the “virtually guarantee” standard proposed by the Appellants in favor of
the Finance Committee’s less-strict “adequate assurance” standard. The court declined to
consider exhibits and expert testimony that Appellants submitted and relied upon ARPC’s
projection of a $68-million-NPV post-disbursement “cushion” to conclude that adequate
provision has been made to assure all First Priority Payments. In re Settlement Facility Dow
Corning Trust, 2013 WL 6884990, at *10. It also determined that the amount in the Litigation
Fund and a $200 million “Time-Value Credit” are available assets for the purpose of determining
whether there are sufficient funds to assure all First Priority Claims, but did not rely on those
determinations in light of ARPC’s projection. Id. at *8-9. The district court did not address
whether non-Premium Second Priority Payments would have to be paid at the same time as the
requested Premium Payments. Accordingly, the district court granted the Finance Committee the
authority to make a fifty-percent distribution of historical and future Premium Payments. The
Appellants timely appeal.
5
II. STANDARD OF REVIEW
SFA § 7.03(a) states that “[t]he parties agree that any appeal of an order of the District
Court regarding [authorization of Second Priority Payments] shall be on an abuse of discretion
standard.” This provision is unenforceable because parties “cannot determine this court’s
standard of review by agreement. Such a determination remains for this court to make for itself.”
K & T Enters., Inc. v. Zurich Ins. Co., 97 F.3d 171, 175 (6th Cir. 1996).
The dispute in this case turns on conflicting interpretations of terms found in the Plan and
the SFA. We apply principles of contract interpretation when interpreting a confirmed
bankruptcy plan. In re Dow Corning Corp., 456 F.3d 668, 676 (6th Cir. 2006). When reviewing
a district court’s interpretation of a bankruptcy plan where the district judge did not confirm the
plan but has extensive knowledge of the case, we grant the district court significant deference
with respect to its assessment of extrinsic evidence. In re Settlement Facility Dow Corning
Trust, 628 F.3d 769, 772 (6th Cir. 2010). However, we evaluate de novo a district court’s
interpretation that does not rely on extrinsic evidence. In re Settlement Facility Dow Corning
Trust, 517 F. App’x 368, 372 (6th Cir. 2013). As the district court did not rely upon extrinsic
evidence to interpret Plan and SFA provisions, we review its interpretations de novo. New York
Law governs our interpretation of the Plan and related documents. Plan § 6.13.
III. DISCUSSION
A
We first review the district court’s interpretation of the key requirement that it may
authorize Second Priority Payments only if “adequate provision has been made to assure” that all
future First Priority and Litigation Payments can be paid “based on available assets.” SFA
§ 7.03(a). The court interpreted this to mean that the SFA requires an “adequate assurance” of
6
payment. The parties agree that the district court must rely on projections of the availability of
funds, including the cost of making future First Priority and Litigation Payments and the cost of
the requested Second Priority Payments, to determine whether making Second Priority Payments
would jeopardize future First Priority and Litigation Payments. They disagree over the level of
confidence that the district court must have in the projections before it may authorize Second
Priority Payments.
Appellants argue that the proper standard of confidence is one of “virtual guarantee”
because, under New York law, “assurance of payment” is equivalent to “guarantee of payment.”
Appellants’ Br. at 32. The Appellee argues for interpreting SFA § 7.03(a) to mean that the court
need only find that available assets provide “adequate assurance” that all higher-priority
payments can be made. Appellee’s Br. at 43. “Adequate assurance” is a term of art in the
Bankruptcy Code that denotes the assurance of performance that a trustee must provide to
assume a contract or lease after a default. 11 U.S.C. § 365(b)(1)(C). This level of assurance
falls below “absolute guarantee,” In re Fine Lumber Co., 383 B.R. 565, 573 (Bankr. E.D.N.Y.
2008), and can mean “a strong likelihood,” In re Bygaph, Inc., 56 B.R. 596, 605-06 (Bankr.
S.D.N.Y. 1986), or “more probable than not,” In re Patriot Place, Ltd., 486 B.R. 773, 803-04
(Bankr. W.D. Tex. 2013).4
The district court adopted the Appellee’s “adequate assurance” standard. In re Settlement
Facility Dow Corning Trust, 2013 WL 6884990, at *6 (“The Court finds that the Finance
Committee’s and the CAC’s arguments regarding plan interpretation of the phrases at issue are
the more persuasive.”). Noting that the meaning of “adequate” depends upon context, id. at *7,
4
“Adequate assurance” is also a term of art in contract law. Under the Uniform Commercial Code, it is the
assurance of performance that a contracting party can demand after discovering grounds for insecurity. U.C.C. 2-
609(1). “In appropriate circumstances, a promise to perform can be an adequate assurance.” Enron Power Mktg.,
Inc. v. Nev. Power Co., 2004 WL 2290486, at *6 (S.D.N.Y. Oct. 12, 2004).
7
the district court did not articulate a precise confidence level for “adequate,” but ruled that a
projection of a $68-million-NPV cushion meets that standard. Id. at *10.
The district court rejected the “virtual guarantee” standard for two reasons, neither of
which we find persuasive. First, the district court found that it would frustrate SFA § 701(c)(v)’s
(denominated by the district court as the “Premium Payment provision”) purpose of giving “the
Finance Committee the discretion to seek court approval to pay Premium Payments
contemporaneously with the First Priority Payments if the Finance Committee is ‘reasonably
assured’ that there are sufficient funds to distribute both payments.” Id. at *6. The Premium
Payment provision is the only portion of the SFA that contemplates the contemporaneous
payment of lower- and higher-priority payments, and it states that:
Nothing herein shall be interpreted as limiting the discretion of the Finance
Committee with the approval of the District Court to pay lower priority payments
and higher priority payments contemporaneously, so long as the ability to make
timely payments of higher priority claims is reasonably assured.
SFA § 7.01(c)(v) (emphasis added). A condition precedent to this provision’s applicability is
district-court approval to make lower-priority payments, which could be granted only if
“adequate provision has been made to assure” higher-priority payments. Id. §§ 7.01(c)(iv),
7.03(a). Therefore, to the extent that the Premium Payment provision has as its purpose
facilitating the contemporaneous payment of Premium and higher-priority Payments, that
purpose is subordinate to the district-court approval procedures and so cannot be the basis for
interpreting those procedures. In sum, the “reasonably assured” language of the Premium
Payment provision is applicable only after the CAC and the Finance Committee demonstrate that
“adequate provision has been made to assure” payment of the First Priority and Litigation
Payments. SFA §§ 7.01(c)(iv), 7.03(a).
8
The district court also rejected the Appellants’ “virtual guarantee” interpretation because
it believed that the term “‘adequate provision’ modifies the term ‘assure,’” and that the cases
Appellants cited “[did] not construe the term ‘adequate provision,’ but only the term ‘assure.’”
In re Settlement Facility Dow Corning Trust, 2013 WL 6884990, at *6. The district court has it
backwards: the term “assure” provides context for the term “adequate provision.” If a borrower
tells a bank that he needs to borrow “enough money to buy a house,” we would not look to the
term “enough money” to find the meaning of “buy a house.” The obvious inquiry would be to
figure out the price for buying the house to determine how much money is enough. Similarly,
the relevant inquiry here is to determine what provision would be adequate. New York law
recognizes that defining “adequate provision” may be difficult because “the notion of ‘adequate’
is a variable one; some things are more adequate than others.” Broodstone Realty Corp. v.
Evans, 251 F. Supp. 58, 64 (S.D.N.Y. 1966). Fortunately, SFA § 7.03(a) makes the requisite
level of adequacy clear: the provision must be so adequate as to “assure” future First Priority and
Litigation Payments. We look to the word “assure” to interpret “adequate provision.” The New
York case cited by the parties interpret the word “assure,” made in the context of making future
payments, to mean guaranteeing that those payments will be made. Utils. Eng’g Inst. v. Kofod,
58 N.Y.S.2d 743, 744-745 (N.Y. Mun. Ct. 1945) (“It is true that the dictionary gives different
meanings to the word ‘assure’ depending on the way it is used. . . . In the way in which the word
was used here [i.e., to assure future payment], the word means ‘guarantee’ and all parties must
have so understood it.”).
Because it is impossible to account for all possible future uncertainties, we will not
impose an “absolute guarantee” standard of confidence, as that would make SFA § 7.03(a)
superfluous. See Reyes v. Metromedia Software, Inc., 840 F. Supp. 2d 752, 756 (S.D.N.Y. 2012)
9
(noting that it is a “cardinal rule that a contract should not be read to render any provision
superfluous”). Accordingly, we adopt the Appellant’s terminology of “virtual guarantee” to
describe the required confidence standard under SFA § 7.03(a). While this standard does not
require absolute certainty, it is nonetheless stricter than the “strong likelihood” or “more
probable than not” levels of confidence that describe “adequate assurance.”
B
We now turn to the question of whether the district court erred by refusing to consider the
Appellants’ reports and testimony. The Appellants sought to undermine ARPC’s projections at
the payment-authorization hearing by offering reports and expert testimony that criticize ARPC’s
methodologies and conclusions. The district court declined to consider these reports and
testimony because “the SFA provides that the Court consider the recommendation of the Finance
Committee based on the Independent Assessor’s analysis and projections.” In re Settlement
Facility Dow Corning Trust, 2013 WL 6884990, at *9 (emphasis added). While the Appellants
are guaranteed an “opportunity to be heard with respect to the motion [to authorize the
distribution of Second Priority Payments]” under SFA § 7.03(a), the district court nonetheless
refused to consider their evidence because the Appellants already “had the opportunity to test
and challenge the Independent Assessor’s Reports throughout the years, yet no objections have
been brought to the Court’s attention that the Reports have been misleading or inaccurate.” Ibid.
We first consider whether the Appellants’ “opportunity to challenge the Independent
Assessor’s Reports throughout the years,” ibid. (emphasis added), satisfied their contractual right
to an “opportunity to be heard with respect to the motion,” SFA § 7.03(a) (emphasis added), and
conclude that it did not. In the due-process context, an “opportunity to be heard [is] an
opportunity which must be granted at a meaningful time in a meaningful manner.” Armstrong v.
10
Manzo, 380 U.S. 545, 552 (1965). We find this understanding of the term relevant to
interpretation of SFA § 7.03(a), which concerns the proper procedures for payment-authorization
hearings. It would not be a meaningful opportunity if the Appellants must voice specific
objections to ARPC’s projections before they know what arguments those projections were being
used to support. For example, one of Appellant’s experts criticized ARPC’s methodology for
failing to specify the level of confidence in its projections. This criticism does not allege that the
projections are necessarily “misleading or inaccurate,” but rather that they do not prove what
they are cited as proving, i.e., high confidence in an accurate and precise projection. Because
ARPC projections were used for many purposes that do not require a confidence estimate, it is
understandable that the Appellants did not object to the lack of a confidence estimate in those
projections until the Finance Committee’s motion to disburse lower-priority payments under
SFA § 7.03(a) made confidence a relevant issue. Further, the phrase “with respect to the
motion” makes it clear that the Appellants’ “opportunity to be heard” applies to any evidence
offered at the payment-authorization hearing, even if they may have had opportunity to object in
the past.
Next, we consider whether the Appellants’ right to an “opportunity to be heard” includes
the right to challenge ARPC’s projections and conclude that it does. While the district court is
correct in that it must make its decision to authorize Second Priority Payments “based on the
Independent Assessor’s analysis and projections,” In re Settlement Facility Dow Corning Trust,
2013 WL 6884990, at *9 (emphasis added), those projections are neither immune from criticism,
nor impervious to modification by the court, depending on evidence developed at the hearing. If
the parties intended that the Independent Assessor’s projections could not be challenged at the
hearing, they could have made them determinative, rather than requiring district-court review
11
and approval. An opportunity to be heard must include the right to make methodological
challenges at the relevant time. Accordingly, we reverse the district court’s judgment insofar as
it interpreted the SFA to grant it the discretion to ignore timely produced, otherwise admissible
evidence concerning whether ARPC’s projections demonstrate that “adequate provision has been
made.”
C
The Appellants raise several other questions that we need not resolve in order to dispose
of this appeal. However, as the district court may consider these matters on remand, we note the
arguments. First, the Appellants argue that the district court’s asset-sufficiency analysis should
consider the cost of making non-Premium Second Priority Payments—Increased Severity and
Class 16 Payments—on the same basis as the requested Premium Payments. The Plan expressly
requires that Class 16 Payments must be made “on the same basis and with the same priority as
[other] ‘Second Priority Payments’ under the Settlement Facility Agreement,” Plan §§ 6.16.5,
6.16.6, and the CAC concedes that “all categories of Second Priority claims could be paid
simultaneously.” Appellee’s Br. at 36 (emphasis added).
Second, the Appellants challenge the district court’s dicta that it can count the nearly
$400 million in the Litigation Fund as available for the purpose of determining whether there are
sufficient funds to assure all higher-priority payments. The SFA expressly provides that the
Litigation Fund is separate from the Settlement fund and “shall be used solely for the payment of
Litigation Payments.” Id. § 7.01(b)(ii) (emphasis added). The only exception to this rule is that
the Litigation Fund can be used, subject to district-court approval, to make First Priority
Payments “[i]n the event that the Settlement Fund lacks sufficient funds in the aggregate to pay
in full all First Priority Payments.” Id. § 7.03(b).
12
Finally, Appellants dispute the district court’s dicta that the Settlement Fund will be
entitled to an additional $200 million. In 2013, we rejected Dow Corning’s request for a $200
million (nominal) “Time-Value Credit” for early payment of $1 billion (nominal) but expressly
left undecided the question of whether Dow Corning is also entitled to a net-present-value
adjustment. In re Settlement Facility Dow Corning Trust, 517 F. App’x at 378-79. Both issues
concern whether Dow Corning is overpaying, in nominal terms, its obligation to place
$1.95 billion NPV into the Settlement Fund. Id. at 372.
IV. CONCLUSION
We REVERSE the district court’s judgment with respect to its rulings that (1) “adequate
assurance” is the proper standard for assessing the availability of funds under SFA § 7.03(a) and
(2) that the SFA grants it the discretion to ignore otherwise competent reports and testimony
challenging ARPC’s methodologies, and we REMAND for further proceedings consistent with
this opinion.
13
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Order entered October , 2012
In The
Court of appeatti
liftb 3Biotritt of Texass at 3Battati
No. 05-12-00541-CR
KENNETH FITZGERALD, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 204th District Court
Dallas County, Texas
Trial Court Cause No. F92-73565-Q
ORDER
The Court has received appellant's brief. In his first issue, appellant complains of the
loss of the record from the original plea hearing he received a probated sentence. In the brief,
appellant references a letter from court reporter Marissa Garza that states Don Hardy recorded
the May 28, 1993 plea hearing, Mr. Hardy has died, and she cannot locate the record.
Appellant's counsel also filed a letter stating he could not agree to a substituted record. This
Court, however, has not ordered the trial court to make findings, required by Texas Rule of
Appellate Procedure 34.6(f) in regards to the missing record.
Accordingly, pursuant to rule 34.6(f), we ORDER the trial court to make findings
regarding the following:
• Whether appellant timely requested preparation of the record from the May 28, 1993
hearing.
• Whether the notes of the notes of the hearing taken by Mr. Hardy have been lost or
destroyed or whether they can be retrieved and transcribed.
• If the notes have been lost or destroyed, whether appellant is at fault for the loss or
destruction of the record.
• Whether the partics can agree on a substituted record.
We ORDER the trial court to transmit a record containing its findings of fact, any
supporting documentation, and any orders to this Court within THIRTY DAYS of the date of
this order.
We ABATE the appeal to allow the trial court to comply with this order. The appeal will
be reinstated thirty days from the date of the order or when the findings are received.
DAVID L. BRIDG
4.----------'
JUSTICE
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8 F.3d 27
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.Eugene J. HUTCH, Plaintiff-Appellant,v.Gary KAPLAN, Defendant-Appellee.
No. 93-15466.
United States Court of Appeals, Ninth Circuit.
Submitted Oct. 13, 1993.*Decided Oct. 15, 1993.
Before: BEEZER, KOZINSKI and KLEINFELD, Circuit Judges.
1
MEMORANDUM**
2
Eugene J. Hutch, a Hawaii state prisoner, appeals pro se the district court's dismissal of his 42 U.S.C. § 1983 prisoner civil rights action for failure to serve process within 120 days of filing his complaint as required under Fed.R.Civ.P. 4(j). We have jurisdiction under 28 U.S.C. § 1291. We review the district court's dismissal under Rule 4(j) for an abuse of discretion, Puett v. Blanford, 921 F.2d 270, 273 (9th Cir.1990), and we affirm.
3
Hutch contends that he had good cause for failing to serve process within 120 days of filing his complaint because the district court did not rule on his in forma pauperis motion within that 120 day period.1 We disagree. Dismissal without prejudice is mandatory under Rule 4(j) unless the plaintiff has demonstrated "good cause" or excusable neglect for his failure to serve within 120 days of filing the complaint, regardless of whether an in forma pauperis motion is pending. Fed.R.Civ.P. 4(j); Boudette v. Barnette, 923 F.2d 754, 755-56 (9th Cir.1991). The good cause exception applies only in limited circumstances, and inadvertent error or ignorance of governing rules alone will not excuse a failure to effect service of process. Hamilton v. Endell, 981 F.2d 1062, 1065 (9th Cir.1992). Here, the record shows that Hutch did nothing whatsoever to effectuate service of his complaint filed July 1, 1991, even after in forma pauperis was denied on April 20, 1992. We agree with the magistrate judge that based on the court's delay in ruling on the in forma pauperis motion, Hutch could have filed a motion to extend the service period, but he did not do so. See Fed.R.Civ.P. 6(b). In fact, Hutch was silent between the April denial of in forma pauperis status and the district court's December 1992 order to show cause. Accordingly, the delay in ruling on his in forma pauperis motion does not under these circumstances constitute excusable neglect for his failure to serve his complaint in a timely manner, and the district court properly dismissed this action.
4
AFFIRMED.
*
The panel finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); 9th Cir.R. 34-4
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
1
Because we may affirm on any grounds presented in the record, see Kruso v. International Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir.1989), cert. denied, 496 U.S. 937 (1990), we need not address Hutch's contentions that the magistrate judge improperly denied his motion to proceed in forma pauperis and the district court improperly declined to review that order as untimely pursuant to Local Rule 404-3
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577 P.2d 72 (1978)
Allen Tate EDMONDSON, Jr., Appellant,
v.
SIEGFRIED INSURANCE AGENCY, INC., a corporation, Board of Review for the Oklahoma Employment Security Commission, Appellees.
No. 50872.
Supreme Court of Oklahoma.
April 4, 1978.
Boyd & Parks by Ed Parks and George Hooper, Tulsa, for appellant.
Conner, Winters, Ballaine, Barry & McGowen by John S. Athens and Gary C. Clark, Tulsa, for appellees.
*73 BERRY, Justice:
Appellant initiated an action in Tulsa County District Court seeking judicial review of an adverse decision by a Board of Review [40 O.S.Supp. 1976 § 220(c)] denying appellant's claim under the Oklahoma Employment Security Act, 40 O.S. 1971 § 211 et seq. A proceeding for judicial review is authorized under the Act by § 216(d)(7) and (8).
Appellant as plaintiff below named as defendant Oklahoma Employment Security Commission and Siegfried Insurance Agency, Inc., omitting the Board of Review as a party defendant. Both the Oklahoma Security Commission and the Board of Review of that Commission are required to be named as co-defendants, as well as any other parties to the proceedings before the Board of Review.
Demurrer to plaintiff's petition was interposed by a named co-defendant, was sustained and the cause was dismissed. The petition in the district court names as defendants the Oklahoma Employment Security Commission and plaintiff's former employer, Siegfried Insurance Agency, Inc., omitting the Board of Review. The appellant's petition in error names the former employer and the Board of Review of the Oklahoma Employment Security Commission, omitting the Commission as a party. Siegfried Insurance Agency, Inc., has moved in this Court for dismissal of the appeal, urging lack of jurisdiction in this Court resulting from failure by the appellant to name a necessary party.
The judicial review provided by the cited statute is limited to questions of law if the appealed decision is supported by evidence and no fraud exists. It is a special proceeding and the procedural requirements are mandatory. The Oklahoma Employment Security Commission and the Board of Review of that Commission, and any other parties to the proceeding before the Board of Review, are necessary parties and failure by a plaintiff seeking judicial review of a decision by the Board of Review to name necessary parties as defendants in a timely commenced proceeding in the district court is jurisdictional. In City of Oklahoma City v. Lacy, Okl., 336 P.2d 906, an appeal was dismissed for omission of a necessary party.
The matter is one of first impression in our jurisprudence, but has been often dealt with in other jurisdictions. The Missouri decision in Duzer v. Industrial Commission, Mo. App., 402 S.W.2d 616, 618, is persuasive. *74 There a substantially similar statutory provision was applied. As in Missouri, here the statute 40 O.S. 1971 § 216(d)(7) and (8) is complete and exclusive in providing for judicial review. The terms of the statute must be complied with before a court can acquire jurisdiction. Necessary parties are clearly indicated and our decision is that the Court does not acquire jurisdiction unless the action is timely brought and all necessary parties are named. A like conclusion is reached in Cuny v. Annunzio, 411 Ill. 613, 104 N.E.2d 780, 782. This Court treats on necessary parties in Ogle v. Ogle, Okl., 517 P.2d 797.
Under the applied statute the duty of preparation of a record for district court judicial review devolves upon the Board of Review. Failure to name the Board as a party would leave the court with no record to review and no process for obtaining such record. The statute clearly denominates the Board and the Commission as separate entities in proceedings for judicial review.
The appeal is dismissed for the lack of jurisdiction.
HODGES, C.J., LAVENDER, V.C.J., and DAVISON, WILLIAMS, IRWIN, BARNES and DOOLIN, JJ., concur.
SIMMS, J., not participating.
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Order Michigan Supreme Court
Lansing, Michigan
December 3, 2010 Marilyn Kelly,
Chief Justice
140956 Michael F. Cavanagh
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
HERITAGE IN THE HILLS HOMEOWNERS Diane M. Hathaway
ASSOCIATION, Alton Thomas Davis,
Plaintiff-Appellant, Justices
and
ROBERT J. LUTTERMOSER,
Plaintiff,
v SC: 140956
COA: 286074
Oakland CC: 06-075239-CZ
HERITAGE OF AUBURN HILLS, L.L.C.,
d/b/a HERITAGE HILLS OF AUBURN
HILLS, L.L.C., SILVERMAN BUILDING
COMPANIES, INC., d/b/a SILVERMAN
COMPANIES, INC., and d/b/a SILVERMAN
and d/b/a SILVERMAN HOMES, TOLL
DEVELOPMENT CO., INC., d/b/a TOLL
BROTHER, INC., and U.S. HOMES
CORPORATION,
Defendants-Appellees,
and
GOJCAJ CONSTRUCTION CORPORATION,
Defendant.
_________________________________________/
On order of the Court, the application for leave to appeal the February 2, 2010
judgment of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the questions presented should be reviewed by this Court.
KELLY, C.J. and HATHAWAY, J., would vacate Part VI of the Court of Appeals
opinion concerning the trial court’s holdings related to the individual owners and remand
this case to the Court of Appeals for plenary consideration of plaintiff Luttermoser’s
arguments.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
December 3, 2010 _________________________________________
d1124 Clerk
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317 F.2d 429
Minerva BRADLEY, I. A. Jackson, Jr., Rosa Lee Quarles, JohnEdward Johnson, Elihu C. Myers and Elizabeth S.Myers, Appellants,v.The SCHOOL BOARD of the CITY OF RICHMOND, VIRGINIA, H. I.Willet, Division Superintendent of Schools of the City ofRichmond, Virginia, and E. J. Oglesby, Alfred L. Wingo andE. T. Justis, individually and constituting the PupilPlacement Board of the Commonwealth of Virginia, Appellees.
No. 8757.
United States Court of Appeals, Fourth Circuit.
Argued Jan. 9, 1963.Decided May 10, 1963.
Henry L. Marsh, III, Richmond, Va. (S. W. Tucker, Richmond, Va., on brief) for appellants.
Henry T. Wickham, Sp. Counsel, City of Richmond (J. Elliott Drinard, City Atty., Richmond, Va., and Tucker, Mays, Moore & Reed, Richmond, Va., on brief) for appellees, The School Board of the City of Richmond, Virginia, and H. I. Willet, Division Superintendent of Schools.
Before BOREMAN, BRYAN and J. SPENCER BELL, Circuit Judges.
BOREMAN, Circuit Judge.
1
This is a school case involving alleged racially discriminatory practices and the maintenance of public schools on a racially segregated basis in the City of Richmond, Virginia. In September 1961 eleven Negro pupils, their parents and guardians instituted this action to required the defendants to transfer the pupils from Negro public schools to white public schools.1 The plaintiffs also pray, on behalf of all persons similarly situated, that the defendants be enjoined from operating racially segregated schools and be required to submit to the District Court a plan of desegregation. The District Court ordered that the individual infant plaintiffs be transferred to the schools for which they had applied. This appeal is based upon the refusal of the court to grant further injunctive relief.
2
Defendant, Virginia Pupil Placement Board, answered the complaint, admitting that plaintiffs had complied with its regulations pertaining to applications for transfer but denying discrimination and other allegations of the complaint. The defendants, School Board of the City of Richmond and the Richmond Superintendent of Schools, answered and moved to dismiss on the ground that sole responsibility for the placement of pupils rested with the Virginia Pupil Placement Board pursuant to the Pupio Placement Act of Virginia, Sections 22-232.1 through 232.17, Code of Virginia, 1950, as amended.2
3
The defendants interpreted the bill of complaint as attacking the constitutionality of the Pupil Placement Act and the motions to dismiss were grounded also on the theory that constitutionality should first be determined by the Supreme Court of Appeals of Virginia or the case should be heard by a District Court of three judges. The Court below correctly denied the motions to dismiss after determining that the constitutionality of the Act had not been challenged by plaintiffs.
4
The record discloses that the City of Richmond is divided into a number of geographically defined attendance areas for both white and Negro schools. These areas were established by the School Board prior to 1954 and have not been materially changed since that time. It is admitted that several attendance areas for white and Negro schools overlap. The State Pupil Placement Board enrolls and transfers all pupils and neither the Richmond School Board nor the city Superintendent of Schools makes recommendations to the Pupil Placement Board.
5
During the 1961-62 school term, 37 Negro pupils were assigned to 'white' schools. For the 1962-63 school term, 90 additional Negro pupils had been so assigned. At the start of the 1962-63 school term, all of the 'white' high schools had Negro pupils in attendance. Negro pupils also attend several of the 'white junior high schools and elementary schools.
6
Certain additional facts are clearly established by the record. The City School Board maintains five high schools, three for whites and two for Negroes; five junior high schools for whites and four for Negroes; eighteen elementary schools for whites and twenty-two for Negroes. As of April 30, 1962, there were 40,263 pupils in Richmond public schools, 23,177 Negroes, 17,002 whites and 84 non-whites of a race other than Negro but considered white for the purpose of assignment in the Richmond public school system. Only 37 Negroes were then attending schools which white children attended, 30 of those being in the 'white' Chandler Junior High School. Three of the remaining seven were in attendance at the 'white' John Marshall High School, one attended the 'white' Westhampton Junior High School and three handicapped children attended the Richmond Cerebral Palsy Center. With the possible exception of the three last mentioned, these children had sought transfers from Negro schools and all but one were able to satisfy the residential and academic criteria which the Pupil Placement Board applies in case of transfers but not in case of initial enrollment. The remaining child had been admitted by court order in eariler litigation.3
7
The 1961-62 Directory of the Richmond, Virginia, Public Schools shows 'White Schools' in one division and 'Negro Schools' in the other. The 'White Schools' are staffed entirely with faculties and officials of the Caucasian race. The schools listed as 'Negro Schools' are staffed entirely with faculties and officials of the Negro race.
8
Thus it is clear, as found by the District Court, that Richmond has dual school attendance areas; that the City is divided into areas for white schools and is again divided into areas for Negro schools; that in many instances the area for the white school and for the Negro school is the same and the areas overlap. Initial pupil enrollments are made pursuant to the dual attendance lines. Once enrolled, the pupils are routinely reassigned to the same school until granduation from that school. Upon granduation, the pupils are assigned in the manner found by the District Court to be as follows:
9
'* * * Assignments of students based on promotion from an elementary school to a junior high school and from a junior high school to high school are routinely made by the Pupil Placement Board. These assignments generally follow a pattern, aptly described as a system of 'feeder schools', that existed prior to 1954. Thus, a student from a white elementary school is routinely promoted to a white junior high school and in due course to a white high school. A Negro student is routinely promoted from a Negro elementary school to a Negro junior high school and finally a Negro high school. In order to change the normal course of assignment based on promotion all students must apply to the Pupil Placement Board. The majority of the plaintiffs in the present case are such applications.'
10
As of April 30, 1962, a rather serious problem of overcrowding existed in the Richmond Negro public schools. Of the 28 Negro schools 22 were overcrowded beyond normal capacity by 1775 pupils and the combined enrollments of 23 of the 26 white schools were 2445 less than the normal capacity of those schools. For the current 1962-63 school term, the applications for transfers from Negro to white schools of only 147 Negro pupils had been granted.
11
Four of the infant plaintiffs, who had completed elementary schools, sought admission to the white Chandler Junior High School. After comparing test scores of these pupils with test scores of other pupils, the Pupil Placement Board denied the applications on the ground of lack of academic qualifications. These plaintiffs contended that pupils from white elementary schools in the same attendance area are routinely placed in Chandler Junior High and their scholastic attainments or qualifications are not scrutinized by the Pupil Placement Board. The District Court concluded that academic criteria were applied to Negro pupils seeking transfer based on promotion, which criteria were not applied to the white pupils promoted from elementary schools to junior high schools. This, said the court, is discriminatory and is a vaid criticism of the procedure inherent in the system of 'feeder schools'. The court further stated:
12
'Proper scholastic tests may be used to determine the placement of students. But when the tests are applied only to Negroes seeking admission to particular schools and not to white students routinely assigned to the same schools, the use of the tests can not be sustained. Jones v. School Board of the City of Alexandria, 278 F.2d 72 (4th Cir. 1960).'
13
Another of the Negro plaintiffs, who was promoted from a Negro junior high school, sought admission to the 'white' John Marshall High School. His application had been denied because he lived thirteen blocks from the John Marshall High School and only five blocks from a Negro high school. However, it was pointed out in the court below that this plaintiff lives in the attendance area of the John Marshall High School and, had he been a white student, he would have been routinely assigned there without considering the didtance of his residence from that school or from another high school. The District Court said: '* * * Residence may be a proper basis for assignment of pupils, but it is an invalid criteria when linked to a system of 'feeder schools'. Dodson v. School Board of the City of Charlottesvill, 289 F.2d 439 (4th Cir. 1961).'
14
The remaining five plaintiffs sought transfers from the Graves Junior High School (Negro) to the 'white' Chandler Junior High School. They were denied transfer by the Pupil Placement Board because of lack of academic qualifications. The evidence showed that the same standards for determining transfers, upon application, from one junior high school to another junior high school were applied by the Board indiscriminately to both white and Negro pupils. The District Court stated:
15
'* * * Were this the only factor in this phase of the case, the issue would involve only judicial review of the decision of an administrative board. However, the situation of these plaintiffs must be considered in the context of the system of 'feeder schools', which routinely placed them in the Graves Junior High School while white students routinely were placed in Chandler Junior High School. The application of scholarship qualifications under these circumstances is discriminatory. Green v. School Board of the City of Roanoke (304) F.2d (118) (4th Cir., May 22, 1962).'4
16
With respect to a determination of the rights of all of the infant Negro plaintiffs, the District Court held:
17
'The foregoing facts and conclusions of law require the admission of the plaintiffs to the schools for which they made application.'An appropriate order was entered injoining and restraining the defendants from denying the infant plaintiffs, therein named, admission to the schools for which they ahd made application. The defendants have not appealed from this order.
18
It follows that each infant plaintiff has been granted the relief which he or she individually sought. But the District Court, although expressing its disapproval of the 'feeder school system' as now operating in the City of Richmond, denied further injunctive relief. The case was ordered retained on the docket for such further relief 'as may be appropriate'.5
19
The conclusion of the District Court that a 'reasonable start toward a non-discriminatory school system' had been made appears to have been based primarily upon consideration of four factors discussed in its opinion as follows:
20
'Rigid adherence to placement of students by attendance areas has been modified in four respects. First, the Chairman of the Pupil Placement Board testified that any Negro child applying for enrollment in the first grade of a white public school in his attendance area is assigned to that school. Second, the Superintendent of Schools testified that George Wythe High School and John Marshall High School had been constructed to accommodate all high school students in their respective attendance areas. Counsel stated in argument that six Negro students had applied for admission to George Wythe High School for 1962 and all had been accepted. Third, a Negro student presently attending a white school, upon promotion to a higher school, is routinely assigned to a white school. Fourth, some Negro students have been assigned to schools in white attendance areas.'
21
In the context of this case the principal questions to be determined may be stated as follows: (1) Are these four basic factors cited by the District Court sufficient to evidence a reasonable start toward maintaining a non-discriminatory school system and consistent with the true concept of equal constitutional protection of the races; and (2) should the court have granted further injunctive relief? We think question (1) must be answered in the negative and question (2) in the affirmative in view of the discriminatory attitude displayed by the Pupil Placement Board toward the transfers sought by the infant plaintiffs in the instant case and which transfers, denied as the result of discriminatory application of residential and academic criteria, were effected only through this protracted litigation.
22
It is notable that there is no assertion here, as in some of the other school cases, of a defense based upon a claim that a reasonable start has been made toward the elimination of racially discriminatory practices coupled with a suggestion that additional time, consistent with good faith compliance at the earliest practicable date, is necessary in the public interest. Instead, the answer of the City school authorities denied that anything done or omitted by them had given rise to the present litigation. The answer of the Pupil Placement Board admitted that the plaintiffs had complied with its administrative procedures but denied and demanded strict proof of facial discrimination.
23
One of the interrogatories served by the plaintiffs was: 'What obstacles, if any, are there which will prevent the racially non-discriminatory assignment of students to public schools in the City of Richmond at the commencement of the 1962-1963 school session?' The local school authorities side-stepped the question by claiming to be unable to answer because all power to assign students to schools had been vested by law in the Pupil Placement Board. That Board replied to the interrogatory as follows: '* * * That to the extent that such question implies discrimination, such implication is denied and that such question lacks sufficient specificity to evoke an intelligent snswer which does not involve broad conclusions or have argumentative dedeuctions. Aside from that, and under Brown v. Board of Education, these defendants know of no reason why students should not be assigned to public schools without discrimination on the ground of race, color, or creed.'
24
The Superintendent of Schools testified that the City School Board had not attempted to meet the problem of overcrowded schools by requesting that Negro pupils in overcrowded schools in a given area be assigned to schools with white pupils. He stated that some new schools and additions to existing schools had been provided. The record discloses that the earlier litigation, Warden v. The School Board of the City of Richmond, referred to in our footnote 3, was instituted on September 2, 1958. At a special meeting held on September 15, 1958 (approximately two weeks after the beginning of the school term), the School Board voted to request the Pupil Placement Board to transfer the pupils then attending the Nathaniel Bacon School (white) to the East End Junior High School (white), and that a sufficient number of pupils be tranferred from the George Mason (Negro) and Chimborazo (Negro) schools to the Nathaniel Bacon building to utilize its capacity, thus converting Nathaniel Bacon to a Negro school.
25
The attitude of the City school authorities, as disclosed by the Superintendent of Schools in his testimony, is and has been 'that the state law took out of the hands of the School Board and the Superintendent of Schools any decision relating to the integration of schools (and that) * * * it has been a feeling of both the School Board and the Administration.' that any conflict that might exist between the state and federal law should be decided by the Courts, not by the School Board and the Administration.'
26
The following is taken from the testimony of the Chairman of the Pupil Placement Board:
27
'Q. Well, what do you do where you have overlapping school zones and school areas?
28
'A. You have got that, of course, in Richmond.
29
'Q. Yes.
30
'A. Normally, I would say fully 99 per cent of the Negro parents who are entering a child in First Grade prefer to have that child in the Negro school. Judging by the small number of applications we get, that must be true. Now, we do not think that this Board was appointed for the purpose or that the law required the attempt on our part to try integrate every child possible. What we thought we were to do was to be completely fair in considering the requests of Negroes, we will say, to go into White schools, but certainly not trying to put those in that didn't want to go in.
31
'Now, when a Negro parent asks for admission of his child in the First Grade of a White school, very clearly he is asking for desegregation or for integration, or whatever you want to call it, and he gets it. And it is true that in general there will be two schools that that child could attend in his area, on White and one Negro, and we assume that the Negro wants to go to the Negro school unless he says otherwise, but if he says otherwise, he gets the other school.'
32
It is true that the authority for the enrollment and placement of pupils in the State of Virginia has been lodged in the Pupil Placement Board6 unless a particular locality elects to assume sole responsibility for the assignment of its pupils.7 The School Board of the City of Richmond has assumed no responsibility whatever in this connection. It does not even make recommendations to the Pupil Placement Board as to enrollments, assignments or transfers of pupils. It here defends charges against it of racial discrimination in the operation of the City's schools on the ground that the sole responsibility is that of the State Board. At the same time the system of dual attendance areas which has operated over the years to maintain public schools on a racially segregated basis has been permitted to continue. Though many of the Negro schools are overcrowded and white schools are not filled to normal capacity, the only effort to alleviate this condition has been to provide new buildings or additions to existing buildings, a move obviously designed to perpetuate what has always been a segregated school system.
33
It is clear that the pupil assignments are routinely made by the Pupil Placement Board. The Chairman of that Board says that now initial enrollments are on a voluntary basis and a Negro child may be enrolled in a white school upon request. But in the absence of a request, the long established procedure of enrollment of Negro children in Negro schools and white children in white schools persists. Then the 'feeder' system begins to operate and the only means of escape is by following the prescribed administrative procedure of filing requests or applications for transfer. The difficulties to be encountered in pursuing this course are graphically demonstrated by the experiences of the infant plaintiffs in this litigation. They were able to escape from the 'feeder' system only after the District Court made possible their release by ordering transfers.
34
A Negro child, having once been caught in the 'feeder' system and desiring a desegregated education, must esxtricate himself, if he can, by meeting the transfer criteria. As this court said in Green v. School Board of City of Roanoke, Virginia, 304 F.2d 118, 123 (4th Cir. 1962):
35
'* * * These are are hurdles to which a white child, living in the same area as the Negro and having the same scholastic aptitude, would not be subjected, for he would have been initially assigned to the school to which the Negro seeks admission.'
36
It was pointed out in Jones v. School Board of City of Alexandria, Virgainia, Board of City of Alexandria, Virginia, reason of the existing segregation pattern, it will be Negro children, primarily, who seek transfers. The truth of this statement is evidenced by the fact that in Richmond only 127 Negro children out of a total of more than 23,000 are now attending previously all-white schools. This court further said in Jones, supra: 'Obviously the maintenance of a dual system of attendance areas based on race offends the constitutional rights of the plaintiffs and others similarly situated * * *.' 278 F.2d 72, 76.
37
In recent months we have had occasion to consider the legality of other 'feeder' systems found in operation in the public schools of Roanoke County, Virginia, and in the City of Roanoke, Virginia. See Marsh v. County School Board of Roanoke County, Va., 305 F.2d 94 (4th Cir. 1962), and Green v. School Board of City of Roanoke, Virginia, 304 F.2d 118 (4th Cir. 1962). In those case, in opinions prepared by Chief Judge Sobeloff, the unconstitutional aspects of the systems there in operation were discussed in the light of the decision of the Supreme Court in Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954), and 349 U.S. 294, 75 S.Ct. 753, 99 L.Ed. 1083 (1955), and in the light of numerous prior decisions of this and other courts. We find it unnecessary to again cite or review the pertinent decisions applicable to the maintenance of racially segregated school systems. In the Marsh and Green case we reached the conclusion that injunctive relief, not only for the individual plaintiffs but for those who might find themselves confronted with the same problems, was justified.
38
A start has, indeed, been made to end total segregation of the races in the Richmond schools. The first step has been taken, one which, no doubt, was distasteful to those who are traditionally and unalterably opposed to an integrated school system. But, upon this record and from the statements of the school officials, we find nothing to indicate a desire or intention to use the enrollment or assignment system as a vehicle to desegregate the schools or to effect a material departure from present practices, the discriminatory character of which required the District Court to order relief to the infant plaintiffs before it. In the present status in which the case was left by the District Court, the school authorities are yet free to ignore the rights of other applicants and thus to require the parents of new applicants to protest discriminatory denials of transfers, to require an infant applicant with his or her parents to attend a hearing on the protest which is not likely to be held earlier than August of 1963, and then to require the applicants to intervene in the pending litigation (possibly to be met with defensive tactics calculated to result in delay), the applicants fervently hoping to obtain relief from the court not long after the beginning of the 1963-64 school session if such relief is to be meaningful.
39
The School Board of the City of Richmond has abdicated in favor of the Pupil Placement Board leaving the latter with a school system which, in normal operation, has demonstrated its potential as an effective instrumentality for creating and maintaining racial segregation. Nearly nine years have elapsed since the decisions in the Brown v. Board of Education cases and since the Supreme Court held racial discrimination in the schools to be unconstitutional. The Richmond school authorities could not possibly have been unaware of the results of litigation involving the school systems of other cities in Virginia, notably Norfolk, Alexandria, Charlottesville and Roanoke. Despite the knowledge which these authorities must have had as to what was happening in other nearby communities, the dual attendance areas and 'feeder' system have undergone no material change.
40
Assignments on a racial basis are neither authorized nor contemplated by Virginia's Pupil Placement Act. We are told that initial assignments are now made on a purely voluntary basis but the Placement Board assumes that a Negro child prefers to attend a school with children of his own race and he is so assigned unless otherwise requested. Richmond's administration of her schools has been obviously compulsive and it is evident that there has been little, if any, freedom of choice.
41
'Though a voluntary separation of the races in schools is uncondemned by any provision of the Constitution, its legality is dependent upon the volition of each of the pupils. If a reasonable attempt to exercise a pupil's individual volition is thwarted by official coercion or compulsion, the orgainzation of the schools, to that extent, comes into plain conflict with the constitutional requirement. A voluntary system is no longer voluntary when it becomes compulsive.' See Jeffers v. Whitley, 309 F.2d 621, 627 (4th Cir. 1962).
42
Notwithstanding the fact that the Pupil Placement Board assigns pupils to the various Richmond schools without recommendation of the local officials, we do not believe that the City School Board can disavow all responsibility for the maintenance of the discriminatory system which has apparently undergone no basic change since its adoption. Assuredly it has the power to eliminate the dual attendance areas and the 'feeder' system which the District Court found to be primarily responsible for the discriminatory practices disclosed by the evidence. It would be foolish in the extreme to say that neither the City School Board nor the Pupil Placement Board has the duty to recognize and protect the constitutional rights of pupils in the Richmond schools. That there must be a responsibility devolving upon some agency for proper administration is unquestioned. We are of the opinion that it is primarily the duty of the School Board to eliminate the offending system.8
43
In these circumstances, not only are the individual infant plaintiffs entitled to relief which has been ordered but the plaintiffs are entitled, on behalf of others of the class they represent and who are similarly situated, to an injunction against the continuation of the discriminatory system and paactices which have been found to exist. As we clearly stated in Jeffers v. Whitley, 309 F.2d 621, 629 (4th Cir. 1962), the appellants are not entitled to an order requiring the defendants to effect a general intermixture of the races in the schools but they are entitled to an order enjoining the defendants from refusing admission to any school of any pupil because of the pupil's race. The order should prohibit the defendant's conditioning the grant of a requested transfer upon the applicant's submission to futile, burdensome or discriminatory administrative procedures. If there is to be an absolute abandonment of the dual attendance area and 'feeder' system, if initial assignments are to be on a nondiscriminatory and voluntary basis, and if there is to be a right of free choice at reasonable intervals thereafter, consistent with proper administrative procedures as may be determined by the defendants with the approval of District Court, the pupils, their parents and the public generally should be so informed.
44
If, upon remand, the defendants desire to submit to the District Court a more definite plan, providing for immediate steps looking to the termination of the discriminatory system and practices 'with all deliberate speed,' they should not only be permitted but encouraged to do so.
45
The District Court should retain jurisdiction of this case for further proceedings and the entry of such further orders as are not inconsistent with this opinion.
46
Reversed in part and remanded.
47
ALBERT V. BRYAN, Circuit Judge (dissenting in part).
48
I see no need for the prospective injunction. With fairness and clarity the opinion of the Court comprehensively discusses and approves the course the District Court prescribed for the defendants to follow in the future. With no reason to believe his directions will not be respected, the District Judge refused the injunction. In this he exercised the discretion generally accorded the trial judge in such situations, especially when the necessity for an injunction must be measured by local conditions. Of these we have no knowledge more intimate than his. I would not add the injunction.
1
Of eleven original pupil plaintiffs, one was assigned by the Pupil Placement Board to an integrated Junior High School to which he had made application before the hearing in the District Court. His case became moot
2
Raised below (but not involved in this appeal) was the issue as to the joinder of the Richmond School Board and Superintendent of Schools as parties defendant. Correctly, we think, the District Court held:
'* * * The State Pupil Placement Board has authority over the placement of pupils, and the local officials refrain from making recommendations to the Board, but approximately 98 per cent of the placements are made routinely as a result of the regulations of the School Board pertaining to attendance areas. The evidence shows that the State Pupil Placement Board has no inclination to vary these attendance areas, although undoubtedly it has authority to do so. In view of this situation, the School Board and the Superintendent of Schools are proper parties.'
3
On September 2, 1958, a suit styled Lorna Renee Warden et al. v. The School Board of the City of Richmond, Virginia, et al. was instituted in the District Court, praying, inter alia, that a permanent injunction be entered restraining the Richmond School Board and its division Superintendent of Schools from any and all actions that regulate or affect, on the basis of race or color, the admission, enrollment or education of the infant plaintiffs, or any other Negro child similarly situated, to and in any public school operated by the defendants
That suit was decided on July 5, 1961. The District Court ordered that the then one remaining Negro plaintiff be transferred from the Negro school located five miles from her home and admitted to the white school in her neighborhood. However, the court denied class relief, stating: 'There is no question as to the right of the infant plaintiff to be admitted to the schools of the City of Richmond without discrimination on the ground of race. She is admitted, however, as an individual, not as a class or group; and it is as an individual that her rights under the Constitution are asserted.'
The court refused to grant a permanent injunction and dismissed the case from the docket.
4
The case to which the District Court referred is styled Green v. School Board of City of Roanoke, Virginia, and is now reported in 304 F.2d 118
5
In its written opinion the District Court stated as follows:
'The plaintiffs prayed that the defendants be enjoined from continuing discrimination in the city schools and that the School Board be required to submit a desegregation plan. The Court has weighed all of the factors presented by the evidence in this case and finds that the defendants have taken measures to eliminate racially discriminatory enrollments in the first grade. Apparently they are eliminating discriminatory enrollments in George Wythe High School (white) and they are routinely assigning Negro students in white junior high schools to white high schools.
'While the School Board has not presented a formal plan of desegregation, the Court finds that the defendants have made a reasonable start toward a nondiscriminatory school system resulting in the attendance of 127 Negro students in white schools for the 1962-1963 school term. In view of the steps that have been taken in this direction, the Court concludes that the defendants should be allowed discretion to fashion within a reasonable time the changes necessary to eliminate the remaining objectionable features of the system of 'feeder schools'.
'In Brown v. Board of Education, 349 U.S. 294, 300 (75 S.Ct. 753, 99 L.Ed. 1083) (1955), the Supreme Court stated 'Traditionally, equity has been characterized by a practical flexibility in shaping its remedies and by a faility for adjusting and reconciling public and private needs.' The Court is of the opinion that the relief decreed in this case is sufficient at this time in view of the evidence presented. The refusal of broad injunctive relief now is not to be construed as approval to continue the 'feeder school system' as it is now operated. See Hill v. School Board of the City of Norfolk, Virginia, 282 F.2d 473 (4th Cir. 1960); Dodson v. School Board of the City of Charlottesville, 289 F.2d 439 (4th Cir. 1961).
'This case will be retained on the docket for such further relief as may be appropriate.'
6
Va.Code Ann. 22-- 232.1-232.17 (Supp. 1960)
7
Va.Code Ann. 22-- 232.18-232.31 (Supp. 1960)
8
Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954); Brown v. Board of Education, 349 U.S. 294, 75 S.Ct. 753, 99 L.Ed. 1083 (1955); Cooper v. Aaron, 358 U.S. 1, 78 S.Ct. 1401, 3 L.Ed.2d 5 (1958)
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219 N.J. Super. 528 (1987)
530 A.2d 847
FREDERICK J. ROLLE, III, PLAINTIFF,
v.
PATRICIA S. ROLLE, DEFENDANT.
Superior Court of New Jersey, Chancery Division Ocean County, Family Part.
Decided May 15, 1987.
*530 Frank A. Louis, for plaintiff (Pogarsky & Louis, attorneys).
Ralph E. McKay, for defendant.
FALL, J.S.C.
This matter comes before the court upon plaintiff's motion in limine for a declaration that the principles enunciated in Mangone v. Mangone, 202 N.J. Super. 505 (Ch.Div. 1985) should be applied in this case with respect to defendant's claim for distribution of premarital property.
The principal issue is whether assets acquired by a party in contemplation of marriage prior to and during a substantial period of cohabitation followed by a marriage are subject to equitable distribution in accordance with N.J.S.A. 2A:34-23. This court must also consider whether such property is otherwise distributable under a variety of equitable remedies.
For the purposes of this motion, the following facts are not in dispute. Plaintiff and defendant began cohabiting in June 1976. They married on November 22, 1983, separated on November 20, 1985 and the complaint for divorce was filed on July 10, 1986. Plaintiff purchased what became the marital domicile in his name only on March 25, 1976 some three months prior to *531 commencement of cohabitation. Defendant had selected the residence. It was acquired in contemplation of the cohabitation and of marriage. At the time the residence was purchased and thereafter the parties had an express and implied agreement that they would be married in the future and during the cohabitation they would share in the acquisition of property and assets. The residence had to be altered to suit the needs of the parties. They began cohabiting in that property in June 1976 and continued to do so until their separation in November 1985. Defendant continues to reside there.
During the period of cohabitation and prior to the marriage plaintiff acquired in his name other property and business assets. At no time did defendant advance any of her funds for the purchase of these assets. Subsequent to the marriage there were little, if any, assets acquired by either party.
Defendant contends that the marital domicile as well as the assets acquired during cohabitation by plaintiff were acquired in contemplation of the marriage. She alleged that they had entered into a domestic partnership whereby all assets were to be shared and that each made contributions to the relationship during that cohabitation period as if they had, in fact, been married.
Research reveals three New Jersey decisions which have dealt with the issue of distributability of assets acquired by one party during a period of cohabitation followed by a marriage or in contemplation thereof under N.J.S.A. 2A:34-23. A brief analysis of each case is necessary.
In Mangone, supra, the wife sought enforcement of an alleged lifetime support contract and equitable distribution, under N.J.S.A. 2A:34-23, of assets acquired by the husband during a six-year period of cohabitation followed by a short-term marriage. The wife alleged it was her money which sustained the parties during the cohabitation while the husband used his earnings to acquire substantial real and personal property. The court viewed the wife's complaint as an attempt *532 to expand the concept of the nonmarital palimony contract, found in the cases of Kozlowski v. Kozlowski, 80 N.J. 378 (1979) and Crowe v. DeGioia, 90 N.J. 126 (1982), on principles of equity by seeking an equitable distribution of property legally and beneficially acquired by the husband during a period of cohabitation followed by a marriage. Mangone, 202 N.J. Super. at 507. The Mangone Court rejected this claim, holding that premarital property is immune from equitable distribution because the plain language of that statute makes it clear the property must be acquired during the marriage, not before it. Id. at 508. The court stated that if there is a contract between the parties to share in premarital assets, the wife would be limited to proof of damages for the breach thereof and not to equitable distribution. Ibid. The court deemed the entry into the marriage as the formation of a new contract which superseded any premarital contract and found "when the parties married each other whatever contractual rights existed before the wedding merged into the greater contract of marriage." Id. at 510. Though the court was applying this "merger" doctrine to the wife's claim of a lifetime support contract, it is apparent that under such an analysis, a premarital implied or express contract to share in the assets acquired by one spouse during a cohabitation period would also be deemed merged into and extinguished by the contract of marriage. That intent can be implied from the following:
... Clearly, the undertaking to support one's spouse and share one's assets in addition to all other marital promises finds full expression and performance in the contract of marriage. Plaintiff's alleged contract is subsumed and merged into the contract created by the marriage vows. To allow plaintiff's claims to succeed would duplicate the relief (alimony and equitable distribution) to which she is entitled (however ultimately measured) in this dissolution action. [Ibid.]
In Raspa v. Raspa, 207 N.J. Super. 371 (Ch.Div. 1985), the husband had purchased a house in his name only four days prior to the marriage. The parties then moved into the house and lived there as husband and wife for 13 years until the filing of the complaint for divorce. The wife had participated in the selection of the house. The Raspa Court found that the strict *533 application of N.J.S.A. 2A:34-23 would be inequitable under the unique facts involved. Id. at 385. It held that equity dictates that the rule of immunity of assets acquired prior to the marriage be departed from when the parties jointly select and one party purchases an asset in contemplation of marriage and for the purposes of the marital enterprise. The Raspa Court placed great emphasis on the facts that the wife had contributed to the mortgage payments and maintenance of the house, she had participated in its selection and the house was intended to be and was for 13 years the marital residence.
In Coney v. Coney, 207 N.J. Super. 63 (Ch.Div. 1985), the parties began cohabiting in 1968 while they were still married to others. In November 1971 they found a house they desired to purchase but the husband was still married so title was taken in the name of the wife as she had obtained her divorce. Eventually his divorce became final and the parties married in November 1978. The complaint for divorce was filed in September 1984. During the entire period from November 1971 until September 1984 the parties lived in the property as a family unit acting as husband and wife even during the period of cohabitation. The wife contended that since the property was solely in her name and acquired prior to the marriage it was not subject to equitable distribution. The court pointed out that in Painter v. Painter, 65 N.J. 196 (1974) the Supreme Court concluded the date of the filing of the complaint should control for purposes of determining what property is eligible for equitable distribution. It further noted in Smith v. Smith, 72 N.J. 350 (1977), where there was a property settlement agreement executed prior to the filing of the divorce complaint, the Supreme Court held that the date of such agreement should control for equitable distribution purposes. The Coney Court cited these cases as examples of circumstances in which the courts have not hesitated to redefine the statutory phrase "during the marriage" at least so far as determining the termination date of the marriage. The court determined that it could therefore redefine the statute by expanding its beginning *534 point to include premarital property as distributable under N.J.S.A. 2A:34-23 if acquired in contemplation of marriage under an implied contract or agreement for the sharing of this premarital property. It is interesting to note that the court then found that the same result under other remedies would also obtain even if the property were deemed not to be subject to equitable distribution. It stated:
But even assuming that the property is not equitably distributable under the statute, there are other remedies available under the facts of this case to achieve the same result. These remedies may be stated as (1) resulting trust, (2) constructive trust, (3) quantum meruit, (4) quasi-contract, and (5) transmutation. [207 N.J. Super. at 74]
The court discussed each of these equitable remedies and concluded that it could find no reason why such equitable remedies, which are available to parties who cohabited but did not marry, should not also be available to those parties who ultimately are married.
It is clear to this court that the purpose of Judge Gladden in Coney, as well as that of Judge Krafte in Raspa, was to avoid a grossly inequitable result if N.J.S.A. 2A:34-23 were to be strictly applied. Each judge fashioned an "in contemplation of marriage" exception to that statute whereby an asset acquired prior to the marriage is considered to have been acquired "during the marriage" if such asset was acquired by one of the parties "in contemplation of marriage" and then the acquired asset became an integral part of the marital enterprise upon the marriage of the parties. Thompson, "Premarital Assets Revisited: The Asset Acquired `In Contemplation of Marriage'," 6 N.J. Family Lawyer 3 (1986).
This court finds significant legal and practical problems with this approach. The "in contemplation of marriage" exception provides little guidance for a court or practitioner. There is no question that our courts have interpreted N.J.S.A. 2A:34-23 to equitably place limitations upon the strict application of that statutory language "acquired ... during the marriage" when dealing with the termination date of eligibility of an asset for distribution thereunder. However, there is a significant difference *535 between the exceptions created in Painter and in Smith from these "in contemplation of marriage" decisions. In the former, while dates other than the termination date of the marriage were utilized for equitable distribution purposes, nevertheless these dates were still "during" and "within" the marriage. The "in contemplation of marriage" case law exception would have a court expand the actual time period within which the marriage existed. Such an expansion would be to an unspecifiable and undefined date.
This court holds that N.J.S.A. 2A:34-23 by its explicit language does not permit an equitable distribution of property legally or beneficially acquired by a party prior to the date of the marriage. It is a simple and definitive rule. In Kozlowski v. Kozlowski, supra, our Supreme Court held that property acquired during periods of cohabitation is beyond the scope of N.J.S.A. 2A:34-23, and therefore is not subject to equitable distribution. The same rule should be applicable where the cohabitation is, in fact, followed by a marriage. There is no logical, equitable or legal reason for our courts to sanction different treatment of assets acquired during cohabitation by the creation of judicial exceptions to a statute the intent of which leaves no doubt. The availability of equitable remedies to deal with factual situations involving property acquired during a period of cohabitation followed by a marriage does not require the application of N.J.S.A. 2A:34-23 to periods of time outside the parameters of the marital relationship. The premarital acquisition of property, whether in contemplation of marriage or not, during a period of cohabitation followed by a marriage does not leave the non-property spouse without a remedy.
This court holds that equitable remedies such as those discussed in Coney are available, under the proper factual circumstances, to a spouse laying claim to assets acquired by the other spouse during their period of cohabitation prior to their marriage. The establishment of a rule of "merger" under Mangone invites an inequitable result. It should be noted, however, that even under such a "merger" doctrine, the application *536 of equitable remedies such as resulting trust, constructive trust, quantum meruit and others would not be foreclosed, since they are not founded in contract but rather in conduct. Mangone cites the case of Rosenberg v. D. Kaltman & Co., 28 N.J. Super. 459 (Ch.Div. 1953) for the proposition that a subsequent contract covering the same parties and subject matter extinguishes the prior contract. In Mangone, the entry into the marriage contract was said to be the expression of intention to extinguish the prior implied contract between the cohabitants. However, a careful examination of the law of contracts reveals that the terms of the second contract must be so inconsistent with those of the former contract that they cannot stand together. Id. at 464. While the marriage contract and the cohabitation contract are obviously between the same parties, it is equally evident that they do not cover the same subject matter, nor are they inconsistent. Under N.J.S.A. 2A:34-23 only property acquired "during the marriage" may be distributed. Property acquired during a period of cohabitation prior to the marriage cannot be equitably distributed under that statute. Accordingly, an implied or express premarital contract to share in the distribution of property acquired during the cohabitation period covers a different subject matter.
The cases of Mol v. Mol, 147 N.J. Super. 5 (App.Div. 1977), Scherzer v. Scherzer, 136 N.J. Super. 397 (App.Div. 1975) and Griffith v. Griffith, 185 N.J. Super. 382 (Ch.Div. 1982) are not inconsistent with this analysis since the interests deemed distributable therein were clearly acquired "during the marriage." Further, there is no reason to conclude that the marriage contract is inconsistent with the premarital cohabitation contract. They cover different subject matters and different rights. A valid premarital express or implied contract for the sharing of assets acquired by either of the parties during a period of cohabitation is not merged into or superseded by the contract of marriage any more than an ante-nuptial contract is superseded by the entry into the marriage contract. The terms of an express or implied contract between cohabitants to share in the acquisition of property during such cohabitation coupled *537 with the contemplation of a marriage is not so inconsistent with the marriage contract and the property distributable thereunder that they cannot stand together.
Additional foundation for this court's rulings can be found in Kozlowski v. Kozlowski, supra. The basic holding of that Supreme Court case is that a man and woman who cohabit without a promise of marriage may enter into an enforceable contract. Kozlowski also holds that a contract between the parties for a share of the man's assets accumulated during the period of cohabitation is barred by the Heart Balm Act, N.J.S.A. 2A:23-1 et seq. That principle is not applicable to this case since there was a marriage. The aforesaid statute merely bars a suit upon breach of a promise to marry.
The concurring opinion of Justice Pashman in Kozlowski is instructive:
Given this circumstance, it would be unwise to require some form of contract as a prerequisite to relief in our courts. Rather, we should presume `that the parties intend[ed] to deal fairly with each other' upon dissolution of the relationship, Marvin [v. Marvin], supra, 18 Cal. 3rd [660] at 683, 134 Cal. Rptr. [815] at 830, 557 P.2d [106] at 121, and consequently, in the absence of agreement, `employ the doctrine of quantum meruit, or equitable remedies such as constructive trust or resulting trusts' in order to insure that one party has not been unjustly enriched, and the other unjustly impoverished, on account of their dealings, id., 18 Cal. 3rd at 665, 134 Cal. Rptr. at 819, 557 P.2d at 110. See, e.g., Hewitt [v. Hewitt], supra [62 Ill. App.3d 861], 20 Ill.Dec. [476] at 481-482, 380 N.E.2d [454] at 459-460.
Since such remedies are grounded in equity, their applicability would depend upon the facts and circumstances of each particular case. The factors to be weighed by a trial judge would include, as examples only, the duration of the relationship, the amount and types of services rendered by each of the parties, the opportunities foregone by either in entering the living relationship, and the ability of each to earn a living after the relationship has been dissolved. These remedies may be cumulative or exclusive. Decisions concerning the complexities that might arise upon application of these principles must be determined on a case by case basis. [80 N.J. at 390-391].
This court can find no basis for a different result when dealing with a premarital express or implied contract to share in the accumulation of assets by either party during the cohabitation followed by a marriage. These equitable remedies are available for application on a case by case basis.
*538 This subject has been dealt with in other jurisdictions. In Watkins v. Watkins, 143 Cal. App.3d 651, 192 Cal. Rptr. 54 (Ct.App. 1983) the court held a premarital implied contract to share assets acquired by either party during a period of cohabitation followed by a marriage of those parties to be enforceable after the marriage. In Watkins, the parties cohabited for six years but were married only eight months. Under the husband's theory the wife forfeited her property rights under the implied contract when she entered into the marriage. The court rejected such an inequitable result. Similar results were reached in Matter of Lindsey, 101 Wash.2d 299, 678 P.2d 328 (Sup.Ct. 1984), Glasgo v. Glasgo, 410 N.E.2d 1325 (Ind. App. 1980) and in Chestnut v. Chestnut, 499 N.E.2d 783 (Ind. App. 1986).
The counterclaim for divorce in this case does not allege a contract for the sharing of assets acquired by plaintiff prior to the marriage during the period of cohabitation, although such a contract is alleged in the certifications submitted by defendant. This court has entered an order permitting defendant to file an amended counterclaim to specify her claims for equitable relief based upon such a contract and upon other equitable remedies. These will be appropriately dealt with based upon the facts of this case elicited through testimony and upon the applicable principles of law.
Counsel for defendant shall submit an order consistent with the foregoing.
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Case: 16-60258 Document: 00514053077 Page: 1 Date Filed: 06/28/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 16-60258
Fifth Circuit
FILED
Summary Calendar June 28, 2017
Lyle W. Cayce
YADER ENRIQUE ROJAS-GUERRERO, Clerk
Petitioner,
v.
JEFFERSON B. SESSIONS, III, U. S. ATTORNEY GENERAL,
Respondent.
Petition for Review of an Order of the
Board of Immigration Appeals
BIA No. A200 005 888
Before REAVLEY, OWEN, and ELROD, Circuit Judges.
PER CURIAM: *
Yader Enrique Rojas-Guerrero, a native and citizen of Nicaragua,
challenges the decision of the Board of Immigration Appeals (BIA) affirming
the Immigration Judge’s (IJ) denial of his motion to reopen removal
proceedings and rescind the in absentia removal order. The BIA concluded
that Rojas-Guerrero was not entitled to actual notice of the removal hearing,
because he had not provided a mailing address; that it was irrelevant whether
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 16-60258 Document: 00514053077 Page: 2 Date Filed: 06/28/2017
No. 16-60258
he had received a list of free legal services available to him, given his non-
compliance with the address requirement; that he had not demonstrated he
was prima facie eligible for adjustment of status; and that nothing warranted
reopening of the removal proceedings sua sponte. Rojas-Guerrero argues that
this was error. We review the denial of a motion to reopen “under a highly
deferential abuse-of-discretion standard.” Barrios-Cantarero v. Holder, 772
F.3d 1019, 1021 (5th Cir. 2014) (quoting Zhao v. Gonzales, 404 F.3d 295, 303
(5th Cir. 2007)).
As to Rojas-Guerrero’s first argument, we have repeatedly held that “an
alien’s failure to receive actual notice of a removal hearing due to his neglect
of his obligation to keep the immigration court apprised of his current mailing
address does not mean that the alien ‘did not receive notice.’” Gomez-Palacios
v. Holder, 560 F.3d 354, 360-61 (5th Cir. 2009). Rojas-Guerrero was personally
served with a Notice to Appear (NTA), which stated that he was required to
provide a mailing address and telephone number where he could be reached;
that failure to do so meant that the Government was not required to provide
written notice of hearing; and that failure to attend the hearing could result in
removal in absentia. Rojas-Guerrero was orally informed, in Spanish, of the
consequences of failing to appear. He cites no case law from this circuit in
support of the argument that his failure to provide a mailing address is
somehow justified because he was not provided with a list of free legal services.
Further, because he was already aware from the NTA that he was required to
provide an address or risk deportation in absentia, Rojas-Guerrero suffered no
prejudice and has not demonstrated a violation of his due process rights. See
Rosales v. Bureau of Immigration & Customs Enf’t, 426 F.3d 733, 736-37 (5th
Cir. 2005). This portion of the petition is denied.
2
Case: 16-60258 Document: 00514053077 Page: 3 Date Filed: 06/28/2017
No. 16-60258
As to Rojas-Guerrero’s second argument, we lack jurisdiction to review
the BIA’s decision not to exercise its discretion to reopen the proceedings. See
Enriquez-Alvarado v. Ashcroft, 371 F.3d 246, 248-50 (5th Cir. 2004). The
Supreme Court’s recent decision in Mata v. Lynch, 135 S. Ct. 2150 (2015), does
not disturb our prior precedent on this point. See Oliveira v. Lynch, 670 F.
App’x 307, 308 (5th Cir. 2016). 1 This portion of the petition is dismissed.
DENIED IN PART AND DISMISSED IN PART.
1 Although an unpublished opinion issued after January 1, 1996, is not controlling
precedent, it may be considered as persuasive authority. See Ballard v. Burton, 444 F.3d
391, 401 & n.7 (5th Cir. 2006) (citing 5TH CIR. R. 47.5.4).
3
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816 F.2d 680
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.William R. JESSEE, Jr., Plaintiff-Appellant,v.SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant-Appellee.
No. 86-5085.
United States Court of Appeals, Sixth Circuit.
April 10, 1987.
Before KRUPANSKY, NELSON and RYAN, Circuit Judges.
PER CURIAM.
1
Claimant Jessee appeals the district court's order dismissing his claim, which had the effect of affirming the Secretary's denial of disability insurance benefits. Following a hearing before an ALJ, the Secretary denied Jessee's claim for benefits. The district court determined that the Secretary's denial was actually a decision not to reopen a prior adverse determination resulting from an earlier claim. Therefore, the court held that the Secretary's decision was not subject to judicial review. For the reasons that follow, we affirm the district court.
2
Jessee filed his first application for disability benefits in 1974. At that time he filed both Supplemental Security Income (SSI) and disability insurance benefit applications. SSI was awarded, but disability benefits were denied initially and upon reconsideration. Jessee's last date of insured status was September, 1972, and because he failed to establish the onset of a disability prior to that date, the ALJ denied his claim. Since he did not seek further administrative review, the ALJ's decision became final.
3
Jessee filed additional claims in 1978 and again in 1982. Both claims were denied initially and upon review.
4
The present application was filed in October, 1983, nine years after the denial of Jessee's first claim. He alleged that the onset of disability was in November, 1967, due to a heart condition, arthritis, difficulty in walking unassisted, and sillicosis. Following a hearing before an ALJ, his claim was again denied. The Appeals Council declined review and Jessee filed suit in federal district court. The district court held that the hearing was conducted to determine if good cause existed for reopening Jessee's prior claim. Since the Secretary denied the claim, the district court concluded that the Secretary decided not to reopen the claim.
5
The regulations governing the Secretary's decision to reopen prior claims provide in part:
6
"A determination, revised determination, decision, or revised decision may be reopened--
7
(a) Within 12 months of the date of the notice of the initial determination, for any reason; [or]
8
(b) Within 4 years of the date of the notice of the initial determination if we find good cause, as defined in Sec. 404.989, to reopen the case...."
9
20 C.F.R. Sec. 404.988. It is well-established that the Secretary's authority to reopen a claim under the conditions set forth in Sec. 404.988 is discretionary. Hunt v. Weinberger, 527 F.2d 544 (6th Cir.1975).
10
It is true that the Secretary's decision does not purport to be a decision not to reopen Jessee's claim. Jessee contends, therefore, that his hearing before the ALJ constitutes a de facto reopening under McGowen v. Harris, 666 F.2d 60, 64 (4th Cir.1981). We reject this contention.
11
In determining whether to reopen a prior adverse decision, the Secretary is free to conduct "such hearings ... and investigations" as he deems necessary. 42 U.S.C. Sec. 405(b). After considering Jessee's additional evidence, the Secretary simply decided not to reopen the prior decision. Therefore, the district court correctly dismissed Jessee's suit. In the absence of a constitutional challenge, the Secretary's refusal to reopen a prior adverse determination "is not an agency action for which judicial review is available." Gosnell v. Califano, 625 F.2d 744, 745 (6th Cir.1980) (citing Califano v. Sanders, 430 U.S. 99 (1977)).
12
The district court is affirmed.
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166 F.3d 350
NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or further order.
UNITED STATES of America, Plaintiff-Appellee,v.Kenny TAYLOR, Defendant-Appellant.
No. 98-6187.
United States Court of Appeals, Tenth Circuit.
Dec. 17, 1998.
Before BRORBY, BRISCOE, and LUCERO, Circuit Judges.
1
ORDER AND JUDGMENT*
BRORBY
2
After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R.App. P. 34(a)(2); 10th Cir. R. 34.1.9. The case is therefore ordered submitted without oral argument.
3
Petitioner Kenny Taylor seeks to appeal from the district court's denial of his motion to vacate, set aside, or correct his sentence, filed pursuant to 28 U.S.C. § 2255. The district court denied the § 2255 motion as untimely filed, applying United States v. Simmonds, 111 F.3d 737 (10th Cir.1997). The district court also denied petitioner's request for a certificate of appealability, required by 28 U.S.C. § 2253 before this court can consider his appeal. Petitioner reurges his request before this court. He also seeks to proceed in forma pauperis, and moves this court to appoint him counsel on appeal.
4
After review of petitioner's motion and supporting documents, we grant his request to proceed on appeal in forma pauperis. However, after careful consideration of petitioner's arguments on appeal, we conclude that he has not made a substantial showing that the district court's decision denied him a constitutional right. See id. Accordingly, petitioner's request for a certificate of appealability is denied, and this appeal is dismissed. Petitioner's request for appointment of counsel is denied as moot. The mandate shall issue forthwith.
*
This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3
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